HomeMy WebLinkAbout03.c. Presentation and Acceptance of 2017 Comprehensive Annual Financial Report (CAFR)
EXECUTIVE SUMMARY
City Council Regular Meeting: June 5, 2018
AGENDA ITEM: Presentation and Acceptance of 2017
Comprehensive Annual Financial Report
(CAFR)
AGENDA SECTION:
Presentations
PREPARED BY: Jeff May, Finance Director AGENDA NO.: 3.c.
ATTACHMENTS: Resolution, PowerPoint Presentation,
CAFR, Management Report, Special
Purpose Audit Reports, Opinion
APPROVED BY: LJM
RECOMMENDED ACTION: Motion to adopt a Resolution Accepting the 2017
Comprehensive Annual Financial Report.
ISSUE
Review and accept the 2017 CAFR.
BACKGROUND
A representative from our audit firm, Malloy, Montague, Karnowski, Radosevich, & Co., P.A. (MMKR),
will be here on Tuesday evening, June 5th, to review the City of Rosemount’s 2017 CAFR. The
representative will give a brief presentation, highlighting items that may be worthy of your attention and
will also be available to answer any questions that you may have.
SUMMARY
Recommend the above motion to accept the 2017 CAFR.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2018 -
A RESOLUTION ACCEPTING THE 2017 COMPREHENSIVE ANNUAL
FINANCIAL REPORT
WHEREAS, the City of Rosemount has been presented its 2017 Comprehensive
Annual Financial Report, prepared with the assistance of the firm of Baker Tilly Virchow
Krause, LLP and audited by our audit firm of Malloy, Montague, Karnowski, Radosevich,
& Co., P.A.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of
Rosemount, accepts its 2017 Comprehensive Annual Financial Report, audited by our
audit firm of Malloy, Montague, Karnowski, Radosevich, & Co., P.A.
ADOPTED this 5th day of June, 2018.
_____________________________
William H. Droste, Mayor
ATTEST:
__________________________
Jeffrey A. May, Deputy City Clerk
CITY OF ROSEMOUNT
AUDIT REPORT
YEAR ENDED DECEMBER 31, 2017
Aaron J. Nielsen, CPA
Opinion on Financial Statements
Financial statements are fairly presented
in accordance with accounting principles
generally accepted in the United States of
America
Reports on Internal Controls and
Compliance
Financial Statement Audit
MN Legal Compliance Audit
AUDITOR’S ROLE
Opinion on Financial Statements
Unmodified opinion –statements are fairly
presented
Internal Controls Over Financial Reporting
Significant deficiency - City has a limited
segregation of duties
Legal Compliance Audit Findings
Missing Withholding Affidavit – 1 of 1 tested
AUDIT OPINIONS AND FINDINGS
GOVERNMENTAL FUNDS
Increase
2017 2016 (Decrease)
Fund balances of governmental funds
Total by classification
Nonspendable 444$ 10,113$ (9,669)$
Restricted 4,854,162 9,301,251 (4,447,089)
Committed 230,162 181,276 48,886
Assigned 13,026,932 11,367,472 1,659,460
Unassigned 7,333,743 6,918,833 414,910
Total – governmental funds 25,445,443$ 27,778,945$ (2,333,502)$
Total by fund
General 9,556,250$ 9,888,534$ (332,284)$
Debt Service 2,983,348 4,307,191 (1,323,843)
Capital Projects 10,804,425 8,407,771 2,396,654
Port Authority TIF 1,849,055 4,994,060 (3,145,005)
Nonmajor funds 252,365 181,389 70,976
Total – governmental funds 25,445,443$ 27,778,945$ (2,333,502)$
as of December 31,
Governmental Funds Change in Fund Balance
Fund Balance
GENERAL FUND FINANCIAL POSITION
GENERAL FUND REVENUES
GENERAL FUND EXPENDITURES
ENTERPRISE FUNDS
Increase
2017 2016 (Decrease)
Net position of enterprise funds
Total by classification
Net investment in capital assets 97,328,281$ 98,722,624$ (1,394,343)$
Unrestricted 23,521,090 21,739,120 1,781,970
Total – enterprise funds 120,849,371$ 120,461,744$ 387,627$
Total by fund
Water 42,351,012$ 41,926,578$ 424,434$
Sewer 34,585,434 34,875,309 (289,875)
Storm Water 42,133,934 41,964,655 169,279
Arena 1,778,991 1,695,202 83,789
Total – enterprise funds 120,849,371$ 120,461,744$ 387,627$
Enterprise Funds Change in Financial Position
Net Position
as of December 31,
WATER FUND
SEWER FUND
STORM WATER FUND
ARENA FUND
STATEMENT OF NET POSITION
Increase
2017 2016 (Decrease)
Net position
Governmental activities
Net investment in capital assets 74,294,033$ 69,942,544$ 4,351,489$
Restricted 7,151,722 7,113,065 38,657
Unrestricted 14,090,028 13,100,682 989,346
Total governmental activities 95,535,783 90,156,291 5,379,492
Business-type activities
Net investment in capital assets 97,328,281 98,722,624 (1,394,343)
Unrestricted 23,521,090 21,739,120 1,781,970
Total business-type activities 120,849,371 120,461,744 387,627
Total net position 216,385,154$ 210,618,035$ 5,767,119$
As of December 31,
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2017
CITY OF ROSEMOUNT, MINNESOTA
CITY OF ROSEMOUNT, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2017
PREPARED BY THE DEPARTMENTS OF
ADMINISTRATION AND FINANCE
LOGAN MARTIN, City Administrator
JEFFREY A. MAY, Finance Director
CITY OF ROSEMOUNT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
As of and for the Year Ended December 31, 2017
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal i
GFOA Certificate of Achievement ix
Organizational Chart x
City Officials xi
FINANCIAL SECTION
Independent Auditors' Report xii - xiv
Management’s Discussion and Analysis 1 - 10
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 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 Position – Proprietary Funds 16
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Funds 17
Statement of Cash Flows – Proprietary Funds 18 - 19
Notes to the Financial Statements 20 - 61
Required Supplementary Information:
Schedule of Revenues and Other Sources Compared to Budget (Budgetary Basis) –
Budget and Actual – General Fund 62
Schedule of Expenditures and Other Uses (Budgetary Basis) – Budget and
Actual – General Fund 63
Schedule of City’s and Nonemployers Proportionate Share of the Net Pension Liability –
Public Employees General Employees Retirement Fund 64
Schedule of Employer Contributions – Public Employees General Employees Retirement Fund 64
Schedule of City’s Proportionate Share of the Net Pension Liability –
Public Employees Police and Fire Fund 65
Schedule of Employer Contributions – Public Employees Police and Fire Fund 65
Schedule of Changes in the Rosemount Fire Department Relief Association’s Net Pension
Asset and Related Ratios 66
Schedule of Employer Contributions – Rosemount Fire Department Relief Association 67
Notes to Required Supplementary Information 68 - 70
Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds 71
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental Funds 72
Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) –
Budget and Actual:
Building CIP Capital Project Sub-Fund 73
Street CIP Capital Project Sub-Fund 74
Equipment CIP Capital Project Sub-Fund 75
CITY OF ROSEMOUNT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
As of and for the Year Ended December 31, 2017
TABLE OF CONTENTS
Page
STATISTICAL SECTION (Unaudited)
Net Position by Component 76
Changes in Net Position 77 – 78
Fund Balances, Governmental Funds 79
Changes in Fund Balances, Governmental Funds 80
Assessed Value (or Tax Capacity) and Estimated Market Value of
All Taxable Property 81
Property Tax Rates – All Direct and Overlapping Governmental Units 82
Principal Property Tax Payers 83
Property Tax Levies and Collections 84
Ratios of Outstanding Debt by Type 85
Ratios of Net General Bonded Debt Outstanding 86
Direct and Overlapping Governmental Activities Debt 87
Legal Debt Margin Information 88
Pledged-Revenue Coverage 89
Demographic and Economic Statistics 90
Principal Employers 91
Full-Time/Permanent Part-Time City Government Employees by
Function/Program 92
Operating Indicators by Function/Program 93
Capital Asset Statistics by Function/Program 94
ROSE1VlOLINT
MINNESOTA
May 7, 2018
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 principles (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, 2017.
This report consists of managemenYs 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 Malloy Montague Karnowski
Radosevich & Co., P.A. (MMKR), 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, 2017, 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 unmodified opinion that the City's financial
statements for the fiscal year ended December 31, 2017, are fairly presented in conformity with GAAP.
The independent auditor's report is presented as the first component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter
of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City
of 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 Strelet West • Rosemount, MN 55068-4997
651 -423-4411 • TDD/TTY 7-1 -1 • Fax 651 -423-5203
www.ci.rosemount.mn.us
Profile of the Government
The City was established as a municipal corporation in 1858, and became a statutory City in 1974. The
City has a Mayor-Council form of government, with the four Council members being elected to
overlapping four-year terms of office and the Mayor serving a four-year term coinciding with the terms of
two of the Council members. 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
2017 Staff Estimate 24,295 2,421 11%
2010 Census 21,874 7,255 50%
2000 Census 14,619 5,997 70%
1990 Census 8,622 3,539 70%
1980 Census 5,083 1,049 26%
1970 Census 4,034
Rosemount has an extensive system of State and County highways and 113 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 approximately 720 acres of industrial and
commercially zoned property ready for development. There is also slightly less than 868 acres within the
Municipal Service Area (MUSA) to permit future residential growth. Rail, air, barge and freeway access
provides Rosemount's economic community with an expedient transportation system. Four major
highways link Rosemount to Minneapolis, St. Paul and the rest of the metropolitan area.
The City provides a full range of services, including police and fire protection; the construction and
maintenance of highways, streets, and other infrastructure; water, sewer, and storm water services; and
recreational activities and cultural events. Certain economic development services are provided through
the Rosemount Port Authority. The Port Authority's financial data has been presented in this financial
report as a blended component unit.
The annual budget serves as the foundation for the City's financial planning and control. All departments
of the City submit requests for appropriation to the City Administrator on or before May 1S'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 30'h. The council holds a public hearing on the proposed budget and must
adopt a final budget and levy by no later than December 20th, prior to the close of the City's fiscal year.
ii
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 62-63 as part of the Required
Supplementary Information.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered
from the broader perspective of the specific environment within which the City operates.
Local economy Rosemount continues to have a significant amount of land available for future
development. The western one third of the community is urbanized with new neighborhoods under
construction in the central portion of the community. Much of this land has been developed with single
family residences and the City is investigating new areas for development as part of the upcoming 2018
Comprehensive Plan update. An Alternative Urban Areawide Review(AUAR), an environmental review
was undertaken and approved in 2013 for the 5,000 acres owned by the University of Minnesota (UMore)
in Rosemount and to the south, in Empire Township. An industrial developer, OPUS, has control over
160 acres within UMore and will begin marketing the land to large industrial users. The City has also
responded to numerous requests for proposals regarding other industrial land available for sale by the
University. Late last year the University received proposals from development companies relating to 435
acres within UMore, south and west of Dakota County Technical College. This will be the first phase of
significant, orderly development. The land will be master-planned and include all types of residential
development along with some commercial and institutional uses. Flint Hills Resources continues to be
the largest tax payer with approximately 11% of the City's total local tax capacity.
Labor market data is very impressive for the State, Minneapolis/St. Paul metropolitan area and Dakota
County, in which Rosemount is located. 2017 labor force numbers were 3,066,881; 1,990,904; and
239,356 respectively with unemployment rates of 3.3%; 2.9% and 2.7% to match. These figures compare
quite favorably with national figures.
Community leadership has preserved 540 beautiful acres of land for 30 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. In 2015, the
City opened a 10,000 square foot addition to the Steeple Center to house a variety of activities and
events.
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 in the City is guided by the adopted 2030
Comprehensive Plan. The Plan, approved in 2009, has been amended on several occasions to permit
new development more reflective of the current market demand than what was envisioned when adopted.
The City has started to compile information associated with the 2040 Comprehensive Plan process. The
current plan anticipates population growth to 31,700 by 2030 and 38,000 by 2040. The regional forecasts
have been reduced due to lagging growth during the economic downturn. However, the City continues to
experience residential growth and recently new commercial and industrial development. The City is also
preparing for growth in new undeveloped areas and has commissioned several utility studies to itemize
costs and infrastructure needs. The population estimate for 2020 is 25,900.
iii
Other factors New residential units continue at a steady pace. In 2017 there were 135 new residential
units permitted, comparable to the 136 in 2016. The majority of new residential development continues to
be single family residential, although more attached products were constructed in 2017 than the previous
year. Recent approval of an apartment complex will provide another rental multi-family product into the
community. Residential development is generally located in the Akron Avenue area with neighborhoods
expanding from the initial approvals of Greystone and Prestwick Place.
In 2017, Rosemount's building activity was reduced from the high in 2016 although continued to be
significantly higher than in the recession years. The total value of construction was estimated at M
74,717,882 with more than half of the valuation coming from residential construction. The remaining
amount was almost evenly split between commercial, industrial and institutional growth. Some of the
more significant projects included installation of the Flint Hills Co-Generation Plant, construction of a new
headquarters for Minnesota Energy Resources, and several school additions to the Rosemount High,
Middle and Elementary schools.
Mobile Technology In 2017 we completed a significant upgrade to our Cartegraph software. The new
Operations Management System (OMS) provides a user-friendly, map-based interface for managing all
facets of Public Works operations. The new web-based platform eliminates the connectivity issues we
experienced in the past, and the administrative functionality allows us to create a secure, customized
environment for each specific user. The new interface provides greater access to information using
mobile devices, allowing us to be more efficient and effective with the services we provide.
Capital Improvement Projects The Public Works Department coordinated and /or completed several
capital improvement projects in 2017:
Pump recondition at Well 14 and the Rural Wells
Power washing the exterior of Connemara Tower and Bacardi Tower
HVAC updates at Well 7
Exterior painting of park shelters at Erickson Park and Jaycee Park
Resurface hard courts at Bloomfield Park and Dallara Park
Crack seal and fog seal Ailesbury Park and Erickson Park tennis court parking lots
Prep for new playgrounds at Connemara, Lions and Chippendale parks in 2018
Drain tile installation at Bloomfield Park soccer field
New carpet in parts of Fire Station 1 and City Hall
Interior painting of the mechanics' shop and the Public Works truck garage (together, these make
up the building we call PW Central)
Exterior maintenance and painting (south wall) at PW Central
City Construction Projects
2017 Street Improvements—Pavement reclamation of Shannon Parkway between CSAH 42 and
CSAH 46, as well as a mill and overlay in the Shannon Hills neighborhoods east of Shannon
Parkway between 145th Street and Connemara Trail.
Well 16—Construction began on the well house in fall 2017, with completion expected in 2018.
Sealing Well 5—Well 5 was drilled out in 2016, and was sealed and capped in 2017.
Parking Lot Improvements—Jaycee Park, Connemara Park, City Hall and the Rosemount
Community Center parking lots were improved in 2017 with a full-depth reclamation of pavement,
as well as spot concrete replacement where needed. Improvements to the City Hall parking lot
included a dedicated entrance to the Police garage, as well as increased parking space near the
splash pad.
CSAH 42 /TH 52 Interchange Improvements—This was a County-led project. It included the
widening of CSAH 42 under TH 52, as well as bridge replacement and ramp reconstruction on
TH 52. As part of this project, the City upsized the water main in the area to better serve future
development to the east.
iv
Developer Construction Projects
Prestwick Place 14'h Addition—This neighborhood includes 38 single-family homes in the
Prestwick Place development, located west of Akron Avenue and north of Connemara Trail.
Prestwick LLC is the developer.
Bella Vista 5th Addition —This neighborhood includes 41 single-family homes in the Bella Vista
development located east of Bacardi Avenue and north of Bonaire Path. US Home Corporation
is the developer.
Greystone 5th
and
6th Additions—These neighborhoods together include 66 single-family homes
located east of Akron Avenue and south of Bonaire Path. CalAtlantic Group, Inc. is the
developer.
Rosewood Crossings—This is a new apartment complex on the south side of 145th Street,just
east of the railroad tracks. The first phase includes two buildings, each with 32 units. KJ Walk,
Inc. is the developer.
Harmony Villas—This development is on the north side of Connemara Trail,just east of TH 3 in
the Harmony development. It will be completed in two phases, with 16 townhomes in the first
phase and 26 townhomes in the second phase (coming in 2018). Mark Elliot Homes is the
developer.
Dunmore—This neighborhood includes 30 single-family homes located west of TH 3 and south
of 132 d Street. Copper Creek is the developer.
The Police Department is responsible for policing services to the community to ensure safety and
response to service calls. A Community Oriented Policing philosophy is core to all services through
partnerships and relationships with citizens, businesses and community organizations. Staffing levels are
continually evaluated to meet the needs of a growing community. The specific service functions within
the Police Department are described below.
Police Administration—This budget provides for the overall leadership, planning, coordination and
management of personnel and administration of activities within the Police Department. This includes
the collection, preparation and filing of crime data and miscellaneous reports with the State of
Minnesota; preparation and oversight of the operating and capital improvements budgets; and
strategic planning for the future needs of the Department and the community. Police Department
leadership is also involved in many consolidated services governance boards that contribute to
policing services for the city. The Dakota Communications Center(DCC), Dakota County Criminal
Justice Network (CJN), Local Government Information Systems (LOGIS), Dakota County Drug Task
Forces and Dakota County Multi-Agency Assistance Group (MAAG) are consolidated services
organizations that contribute to RosemounYs policing services.
Records Unit—The Police DepartmenYs Records Unit is responsible for the processing of over 2,200
case reports each year. Reports require transcription and compilation for transmittal to the city or
county prosecutor's office or any other agency (e.g., social services, county crises, corrections)
requiring information for service to the community. Records staff ensure the Police Department is
compliant with all Minnesota Bureau of Criminal Apprehension data management laws, regulations
and reporting requirements. Administrative support is provided to the entire Police Department for
gun permit applications, criminal background checks and city licensing requirements.
Patrol Operations— Uniformed patrol is the core function of the Police Department and the most
visible in the community. Through 24-hour daily patrols in marked police vehicles, patrol officers
respond to calls for service, investigate traffic accidents, conduct preliminary criminal investigations,
enforce traffic laws and enforce criminal laws. Patrol Officers respond to medical calls as trained first
responders. Through patrol operations the Police Department meets its goal of the protection of life
and property and creating a sense of safety and security in the community. Patrol Officers spend a
significant amount of time developing relationships within the community and contacting members of
community organizations. Patrol Officers perform additional specialty assignments as Crime Scene
Technicians, Use-of-Force Instructors, Multi-Agency Assistance Group (MAAG) Tactical Officers,
Drug Recognition Experts, Special Operations Team (SOT), and Field Training Officers.
v
Criminal Investigations— Patrol Officers and investigators are responsible for the investigation of
criminal incidents through evidence gathering and analysis, witness and suspect interviews, and court
preparation and testimony. Complex investigations or those requiring a multi-jurisdictional or agency
involvement are coordinated by the investigator. This is accomplished by working cooperatively with
other police agencies, the County Attorney's Office, Child Protection, victim services and other local,
state and federal law enforcement agencies. One investigator is assigned to the Dakota County Drug
Task Force, a multi-jurisdictional joint powers entity, whose mission is to investigate drug crimes in
the City of Rosemount and throughout Dakota County.
Crime Prevention and Community Education—A significant effort is made by the Police Department
to inform residents of crime within the community, methods that citizens can take to help prevent
crimes and building relationships with community members. While these objectives are part of each
officer's daily responsibilities, there are specific programs that are frequently associated with
community policing and that emphasize the need for the police and citizens to work together to
prevent criminal activity and reduce the opportunities for criminals to commit crimes.
School Liaison —Officers serve as a liaison to the Rosemount Middle and the Rosemount
High School. One officer is assigned full-time to the High School and a second officer
spends one-quarter time at the Middle School. The liaison officers investigate criminal
incidents that occur at the schools or that involve students at the schools. In addition, the
liaisons work with the school staff to enhance the safety and security for both staff and
students, specifically providing school safety planning, and armed intruder prevention and
response planning. Presentations on a variety of topics are made by the liaison to classes at
all grade levels. The Middle School officer also spends time at each of the elementary
schools, working with staff on any issues and making presentations in classes when
requested.
Community Education — In order to work together with the community, police must share
information concerning criminal activity and crime prevention with the community. Officers
are available to make presentations to community groups and organizations on a variety of
topics. In addition, officers provide prevention tips to persons on a daily basis who report
criminal activity. Several events are also held throughout the year in an effort to build
relationships with the residents and business persons. These include Night-to-Unite block
parties and gatherings, Neighborhood Watch meetings and Public Safety in the Park events.
The Rosemount Police Department also utilizes a Facebook page to inform the public of
safety concerns as well as safety tips.
Reserve Officer Program—Reserve officers are volunteers who supplement the staff of
sworn officers of the Department. The reserve officers are utilized to handle traffic and crowd
control duties during city festivals and celebrations or emergencies, such as hazardous
materials spills or leaks, damage resulting from tornadoes or other severe weather and major
criminal incidents. Reserve officers patrol on some evenings and handle service calls; for
example, assisting stalled motorists and animal complaints. They are also utilized regularly
to provide crime prevention information to citizens at community events or through other
programs.
Chaplain Program—The Police Chaplains assist in a variety of situations in which individuals
or families are having difficulties. Chaplains are able to provide support to persons that are
experiencing stress as a result of the death of a loved one, marital or family problems,
financial struggles or any other event. By utilizing the chaplains to console and counsel
persons in crisis, police officers are able to focus on their primary duties, while the chaplains
are able to remain with the persons involved in the crisis.
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Explorer Program— Exploring is a community based, co-educational program supervised by
the local police department. The Explorer program is designed for young adults ages 14-21
that want to learn more about law enforcement. The program is part of the Boy Scouts of
America and is open to both young men and young women. Membership in the Rosemount
Police Department Explorer Post is restricted to those young people that live in Rosemount or
attend school in Rosemount. Residents of other communities that do not attend school in
Rosemount are turned away. The Rosemount Police Explorer Post was formed in 2014.
Explorers meet twice a month under the direction of the two officers that serve as Post
advisors. During these meetings they conduct post business and train in law enforcement
skills. The Explorers also take part in the statewide Explorer Conference where they
compete against other Explorer Posts in law enforcement scenarios including crime scene
processing, domestic disturbance calls, building searches, etc. In the past, the Explorers
attended the national conference every other year. Several years ago, due to budget
constraints, we ended this. Although the Explorers paid their own way to the conference
there was a cost associated with sending the two officers that serve as post advisors. The
Explorer Post is an opportunity for youth of our community to become exposed to law
enforcement. Some just want to learn more about the police department. Others are truly
exploring" law enforcement as a potential future career. In either case it brings teenagers
closer to the police department in a service capacity. As such it fits with the department's
mission of improving quality of life in our community.
Adult Citizen Academy Program —The Adult Citizen Academy has been a project of the
Rosemount Police Department for the past 8 years. In 2017 the Rosemount Police
Department partnered with the Apple Valley Police Department to conduct an Adult Citizen
Academy. It is a way to offer those who live or work in Rosemount an inside look at the
operation of their police department. It also allows them an opportunity to meet the officers
who serve them. The academy covers topics such as recruiting, ethics, criminal
investigations, the charging process, drug task force, use of force, traffic enforcement,
forensics, and includes a citizen ride-along with a patrol officer. As such it helps fulfill the
department's educational mission.
Teen Citizen Academy Program—In 2017 the Rosemount Police Department partnered with
the Apple Valley Police Department to conduct a Teen Citizen Academy. The academy
covers topics similar to the Adult Citizen Academy, but it is geared towards teens.
Animal Control—The Police Department is responsible for the enforcement of ordinances related to
the control and care of domestic animals. These tasks are mainly handled by Community Service
Officers. Their duties include the licensing of dogs and ferrets, assisting in the handling of stray, lost
or injured animals and other complaints of animals causing a nuisance by barking, howling or being
allowed to roam off the owner's property.
Code Enforcement—The Police Department assists the Community Development Department with
code enforcement of city ordinances related to property maintenance and outside storage. The
Department's Community Service Officers primarily handle this effort. Property owners that are
observed to be in violation of an ordinance are notified of the violation and given an explanation of
how to remedy the violation. The enforcement of city ordinances is important to maintain community
standards, which help the City attain its mission of providing a safe, healthy and pleasant community.
Emergency Management—The City has an all-hazards emergency plan and the Chief of Police
serves as the City's emergency manager. The emergency manager is responsible for the
development of emergency plans in the event of a chemical, technical or natural disaster in the
community (e.g. tornado, flooding, school shooting, or hazardous materials release). The Chief of
Police represents the City of Rosemount on the Dakota County Domestic Preparedness Committee
DCDPC). The DCDPC is comprised of police, fire, dispatch, EMS, public health, and medical facility
representatives to aid all Dakota County cities and Dakota County with all-hazards emergency
planning and leadership. In 2017 the Chief of Police served as the Vice Chair and is currently the
Chair of this governance board.
vii
In 1999, a Family Resource Center building in Rosemount began operations. The 360° Communities
organization (formerly the Community Action Council [CAC]) and other service providers utilize this
building to work with families in need in our community. The City constructed the building with funding
coming entirely from grants and donations and leases the building to 360° Communities to house their
Rosemount operations.
City's financial policies During the current year, none of the City's financial polices had a significant
impact on the financial statements.
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, 2016. This was the
twenty-first consecutive year that the City has achieved this prestigious award. In order to be awarded a
Certificate of Achievement, a government must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted accounting
principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report on a timely basis could not have been accomplished without the efficient
and dedicated services of the Finance Department. We would like to express our appreciation to all
members of City staff who assisted and contributed to the preparation of this report. We would also like
to express our appreciation to the Mayor and the members of the City Council for their interest and
support in planning and conducting the financial operations of the City in a responsible and progressive
manner.
Respectfully s mitt d,
ffrey A. May
Finance Director
viii
xi
Mayor
& City Council
City
Administrator
Finance
Director
Parks and
Recreation
Director
Community
Development
Director
Director of Public Works /
City Engineer
Chief
of Police
Accounting
Supervisor
Payroll
Clerk
Accounts
Payable
Clerk
Utility Billing
Clerks (2 )
Secretary Customer Service
Representative
Parks
Supervisor
Rental
Coordinator
Recreation Facilities
Manager
Building
Maintenance
Workers (3)
Inspections
Secretaries (2)
Planning &
Personnel Secretary
Senior
Planner
GIS Analyst
Building
Official/Fire Marshall
Public Works
Coordinator
Assistant City Engineer
PW Supervisor Records
Supervisor
Secretaries
(2 FT)
Sergeants (6)
Officers (12)
Community Resource
Officer
Detectives (2)
School Resource
Officer
CSOs (2 PT)
Reserve
Commander
Reserve
Officers
City
Attorney
Citizen
Advisory
Commissions
Assistant
City
Administrator
City
Clerk
Communications
Coordinator
Crew Leads (3)
Fac. Maint. Spec
PW Maintenance
Workers (11)
PW Mechanics (2)
Fire Chief
Safety
Coordinator
Fire Prevention/
Education
Secretary
Assistant
Fire Chief
Training
Coordinator
Captains
Lieutenants
Firefighters
Building
Inspectors (2)
Planner
Building
Attendants
Seasonal
Workers
PW
Secretary
Recreation
Supervisors (2)
IT Coordinator
City of Rosemount
Organizational Chart
Recreation
Coordinator
Accountant
Human Resources
Coordinator
PT
IT Coordinator
Sr. Engineering
Technician
x
CITY OF ROSEMOUNT
CITY OFFICIALS
As of and for the Year Ended December 31, 2017
xi
Term of Office Term Expires
ELECTED OFFICIALS:
Mayor Bill Droste Four Years December 31, 2018
Council member Mark DeBettignies Four Years December 31, 2018
Council member Heidi Freske Four Years December 31, 2020
Council member Shaun Nelson Four Years December 31, 2018
Council member Jeff Weisensel Four Years December 31, 2020
APPOINTED OFFICIALS:
City Administrator Logan Martin
Finance Director Jeffrey A. May
Assistant City Administrator Emmy Foster
City Engineer/Public Works Director Brian Erickson
Community Development Director Kim Lindquist
Police Chief Mitchell Scott
Fire Chief Richard Schroeder
Parks and Recreation Director Dan Schultz
CONSULTANTS AND ADVISORS:
Legal Kennedy & Graven
Fluegel Law Firm, P.A.
Auditing Baker Tilly Virchow Krause, LLP
Malloy, Montague, Karnowski, Radosevich & Co., PA
Fiscal Springsted, Inc.
Ehlers & Associates, Inc.
Engineering WSB & Associates
Short, Elliot, Hendrickson, Inc.
KLM Engineering
Bolton & Menk, Inc.
ISG
Oertel Architects, Ltd.
Black & Veatch
TKDA
Barr Engineering Co.
Stantec Inc.
Donahue & Associates, Inc.
SRF Consulting Group, Inc.
Houston Engineering, Inc.
Sunde Engineering, PLLC
Advanced Engineering and Environmental Services, Inc.
Emmons & Olivier Resources, Inc.
Evergreen Land Services Company
Braun Intertec Co.
American Engineering Testing, Inc.
C ERTIFIED
A CCOUNTANTS
P UBLIC
PRINCIPALS
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA/CMA
Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com
xii
INDEPENDENT AUDITOR’S REPORT
To the City Council and Management
City of Rosemount, Minnesota
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Rosemount,
Minnesota (the City) as of and for the year ended December 31, 2017, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as listed in the
table of contents.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our audit . We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts an d disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error .
In making those risk assessments, the auditor considers internal control relevant to the City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
(continued)
xiii
OPINIONS
In our opinion, the financial statements referred to on the previous page 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 as of December 31, 2017, and the
respective changes in financial position, and, where applicable, cash flows thereof, for the year then
ended, in accordance with accounting principles generally accepted in the United States of America.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the required supplementary information (RSI), as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the RSI in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, supplementary information, and
statistical section, as listed in the table of contents, are presented for purposes of additional analysis and
are not required parts of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
(continued)
xiv
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated May 7, 2018 on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose
of that report is solely to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s internal control
over financial reporting and compliance.
Minneapolis, Minnesota
May 7, 2018
Page 1
MANAGEMENT'S DISCUSSION AND ANALYSIS
(Unaudited)
As management of the City of Rosemount (the City), we offer readers of the City's financial statements
this narrative overview and analysis of the financial activities of the City for the fiscal year ended
December 31, 2017. We encourage readers to consider the information presented here in conjunction
with the letter of transmittal and the City’s financial statements following this section.
Financial Highlights
> The assets and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources at the close of the most recent fiscal year by $216,385,154 (net position). Of
this amount, $37,611,118 (unrestricted net position) may be used to meet the government's
ongoing obligations to citizens and creditors.
> The City's total net position increased by $5,767,119. This increase is partially attributable to an
increase in capital assets funded by grants or developers.
> At year end, unassigned fund balance for the General Fund was $7,333,743, or 56 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 7.
> The City's total bonded debt decreased by $4,905,000 (approximately 28%) during the current
year, however $3,275,000 of that decrease related to a payment to an escrow account in 2017 to
refund debt.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report
also contains other supplementary information in addition to the basic financial st atements 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 position presents information on all of the City's assets, liabilities, and deferred
outflows/inflows of resources, with the difference reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether t he financial position of the City is
improving or deteriorating.
The statement of activities presents information showing how the government's net position changed
during the most recent fiscal year. All changes in net position are reported as soon as the underlying
event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in future fiscal
periods (e.g., uncollected taxes and earned/vested but unused vacation and sick leave).
Page 2
Both the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functi ons 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; culture, education and recreation; and conservation and economic development. The business -
type activities of the City include water, sewer, storm water and an 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.
Fund financial statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the
funds of the City can be divided into two categories: governmental funds and proprietary funds.
Governmental funds
Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial
statements, governmental fund financial statements focus on 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 projects fund, and the Port Authority TIF fund all of which are considered major funds. Data
from the four other governmental funds are combined into a single, aggregated presentation. Individual
fund data for each of these nonmajor governmental funds is pr ovided in the form of combining statements
elsewhere in this report.
The City adopts an annual appropriated budget for its general fund. A budgetary comparison schedule
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.
Page 3
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 C ity'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 se parately in the
proprietary fund financial statements.
The basic proprietary fund financial statements can be found on pages 16-19 of this report.
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 20-61 of this report.
Other information
Required supplementary information is included on pages 62-70. 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 71 -75 of
this report. Lastly, the statistical section is included on pages 76-94.
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the City, assets and deferred outflows of resources exceeded liabilities and
deferred inflows of resources by $216,385,154 at the close of the most recent fiscal year.
The largest portion of the City's net position (79 percent) reflects its investment in capital assets (e.g.,
land, buildings, machinery and equipment, infrastructure) less any related debt used to acquire those
assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available 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.
Page 4
City’s Statement of Net Position
Governmental Business-Type 2017 Governmental Business-Type 2016
Activities Activities Totals Activities Activities Totals
Current and other assets $ 32,065,803 $ 25,867,407 $ 57,933,210 $ 32,372,351 $ 24,100,925 $ 56,473,276
Capital assets 85,146,896 98,152,008 183,298,904 81,934,294 99,908,372 181,842,666
Total assets 117,212,699 124,019,415 241,232,114 114,306,645 124,009,297 238,315,942
Deferred outflows of resources 4,895,322 275,410 5,170,732 7,995,925 559,009 8,554,934
Long-term liabilities outstanding 17,756,884 2,912,339 20,669,223 28,539,526 3,687,332 32,226,858
Other liabilities 2,277,996 338,443 2,616,439 1,616,686 266,941 1,883,627
Total liabilities 20,034,880 3,250,782 23,285,662 30,156,212 3,954,273 34,110,485
Deferred inflows of resources 6,537,358 194,672 6,732,030 1,990,067 152,289 2,142,356
Net position:
Net investment in capital
assets
74,294,033
97,328,281
171,623,314
69,942,544
98,722,624
168,665,168
Restricted 7,151,722 - 7,151,722 7,113,065 - 7,113,065
Unrestricted 14,090,028 23,521,090 37,611,118 13,100,682 21,739,120 34,839,802
Total net position $ 95,535,783 $ 120,849,371 $ 216,385,154 $ 90,156,291 $ 120,461,744 $ 210,618,035
An additional portion of the City’s net position ($7,151,722 or 3%) represents resources that are subject to
external restrictions on how they may be used. The remaining bal ance representing unrestricted net
position ($37,611,118) 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 position, both for the government as a whole, as well as for its separate governmental and business -
type activities.
Governmental activities
Governmental activities increased the City’s net position by $5,379,492, accounting for approximately
93% of the total growth in the government’s net position. This compares to an increase (from
governmental activities) of $2,801,834 in 2016. Revenues increased by nearly $1,500,000 mainly related
to charges for services, property taxes, and capital grants and con tributions in 2017. Total expenses
decreased from 2016 and the net effect was the increase in net position of $5,379,492. Net transfers from
business-type activities to governmental activities were $1,041,660 more than the prior year, also
attributing to the changes in net position.
Business-type activities
Business-type activities increased the City’s net position by $387,627 accounting for approximately 7% of
the total growth in the government’s net position. This compares to an increase of $3,276,434 in 2016.
The primary reason for the change in net position compared to the prior year change was due to
significant capital grants and contributions received in prior year.
Page 5
Elements of these changes are as follows:
City’s Changes in Net Position
Governmental Business-
Type
2017
Governmental Business-
Type
2016
Activities Activities Totals Activities Activities Totals
Revenues:
Program revenues:
Charges for services $ 4,300,745 $ 7,303,317 $ 11,604,062 $ 3,726,535 $ 6,506,790 $ 10,233,325
Operating grants and contributions 436,995 84,042 521,037 635,988 24,248 660,236
Capital grants and contributions 3,578,760 631,370 4,210,130 3,181,711 3,184,415 6,366,126
General revenues:
Property taxes 12,317,625 - 12,317,625 11,852,094 - 11,852,094
Other taxes 366,745 - 366,745 354,571 - 354,571
Interest earnings 307,497 295,867 603,364 270,676 339,012 609,688
Change in fair value of investments (20,104 ) (26,236 ) (46,340 ) (147,945 ) (134,583 ) (282,528 )
Other 171,294 - 171,294 103,394 - 103,394
Total revenues 21,459,557 8,288,360 29,747,917 19,977,024 9,919,882 29,896,906
Expenses:
General government 3,859,090 - 3,859,090 4,426,817 - 4,426,817
Public safety 5,170,637 - 5,170,637 5,629,866 - 5,629,866
Public works 5,822,738 - 5,822,738 4,765,115 - 4,765,115
Culture, education and recreation 2,042,299 - 2,042,299 1,959,224 - 1,959,224
Conservation and economic development 4,315 - 4,315 3,968 - 3,968
Interest and fiscal charges 308,567 - 308,567 476,121 - 476,121
Water - 2,175,626 2,175,626 - 2,075,460 2,075,460
Sewer - 2,837,550 2,837,550 - 2,742,402 2,742,402
Storm water - 1,275,073 1,275,073 - 1,228,697 1,228,697
Arena - 484,903 484,903 - 510,968 510,968
Total expenses 17,207,646 6,773,152 23,980,798 17,261,111 6,557,527 23,818,638
Increase in net position
before transfers
4,251,911
1,515,208
5,767,119
2,715,913
3,362,355
6,078,268
Transfers 1,127,581 (1,127,581 ) - 85,921 (85,921 ) -
Increase in net position 5,379,492 387,627 5,767,119 2,801,834 3,276,434 6,078,268
Net position – Beginning of Year 90,156,291 120,461,744 210,618,035 87,354,457 117,185,310 204,539,767
Net position – End of Year $ 95,535,783 $ 120,849,371 $ 216,385,154 $ 90,156,291 $ 120,461,744 $ 210,618,035
Page 6
Expenses and Program Revenues – Governmental Activities
Expenses and Program Revenues – Business-Type Activities
Financial Analysis of the Government’s Funds
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, unassigned fund balance may serve as a useful measure of a government’s
net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $25,445,443, a decrease of $2,333,502 in comparison with the prior year. $7,333,743
constitutes unassigned fund balance, which is available for spending at the government’s discretion (this
amount is entirely in the General Fund and is typically available to meet cash flow needs). A small
amount ($444) is classified as nonspendable in regards to prepaid items, $4,854,162 is classified as
restricted to meet debt service requirements or relates to donations for capital projects, and the remainder
of the fund balance is considered to be committed or assigned and unavailable for discretionary
spending.
0
1
2
3
4
5
6
General Government Public Safety Public Works Recreation Community
Development
Interest and fiscal
charges
Millions
Expenses
Revenue
0
0.5
1
1.5
2
2.5
3
3.5
Water Sewer Storm water Arena
Millions
Expenses
Revenue
Page 7
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned
fund balance of the General Fund was $7,333,743, while total fund balance reached $9,556,250. 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
2007 $ 9,181,100 $ 5,747,445 54%
2008 10,574,900 5,688,243 55%
2009 10,384,800 5,693,475 55%
2010 10,466,000 5,731,123 55%
2011 10,480,400 5,700,071 54%
2012 10,531,800 5,905,056 55%
2013 10,728,600 6,001,628 54%
2014 11,098,600 6,288,615 55%
2015 11,423,500 6,506,697 55%
2016 11,835,528 6,918,833 56%
2017 12,392,700 7,333,743 56%
2018 13,086,400
During the current fiscal year, unassigned fund balance in the General Fund increased by $414,910. The
increase was intentional as the City has determined, through the adoption of a formal Fund Balance
Policy, it would like to maintain an unassigned 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 unassigned 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, 2017, 100 percent of the unassigned fund balance of the General Fund is available
to meet working capital needs.
The debt service fund balance decreased by $1,323,843 due to accelerated principal payments on the
outstanding bonds. The capital projects fund balance increased by $2,396,654 due to debt issues and
transfers in compared to actual capital expenditures (mostly related to timing of collections and
expenditures). The Port Authority TIF fund balance decreased by $3,145,005 due to the payment to an
escrow account to refund debt.
Page 8
Revenues by Source – Governmental Funds
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 position of the utility funds at the end of the year amounted to $23,172,280 while the
arena fund had an unrestricted net position amounting to $348,810. The increase in total net position for
the utility funds was $303,838 after $631,370 from private entities (i.e. developers) as well as net
transfers out of $1,254,081. The increase in total net position for the arena fund was $83,789 which
included net transfers in of $126,500.
Revenues by Source – Proprietary Funds
Taxes
61.5%
Intergovernmental
6.0%
Public charges for
services
17.1%
Licenses and
permits
3.7%
Fines and
forfeitures
0.5%
Special
assessments
3.6%
Investment income
and miscellaneous
7.6%
Charges for services
72.6%
Water meters
0.8%
Connection fees
17.4%
Intergovernmental
1.1%
Investment income
3.5%
Surcharges and
penalties
4.6%
Page 9
General Fund Budgetary Highlights
There were a few slight variances between final budgeted revenues and actual amounts. Building permit
revenue exceeded budget by approximately $46,000 because of more activity than expected. Public
charges for services exceeded budget by approximately $32,000 due mostly to higher than expected
collections for highway & street revenues and Park & Rec revenues. State aid intergovernmental
revenues exceeded budget by approximately $62,000 mainly due to the collection of several small gran ts.
Interest revenues were approximately $33,000 higher than budgeted because of improving market
conditions and miscellaneous revenues were approximately $40,000 more than budgeted mainly because
of a tree dedication received from Flint Hills. All other revenue areas experienced either small surpluses
or deficits that led to the final surplus amount. Overall, total expenditures and other financing uses were
slightly less than 2% under budget with most departments being slightly less than budget and a few being
just slightly over budget.
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, 2017, amounts to $183,298,904 (net of accumulated deprec iation). This investment in
capital assets includes land, buildings and structures, machinery and equipment, water, sewer, and storm
water systems, infrastructure and construction in progress.
City of Rosemount’s Capital Assets
(net of depreciation)
Governmental Business-Type
Activities Activities Totals
Land $ 7,960,624 $ 2,728,077 $ 10,688,701
Land improvements (not depreciable) 2,647,412 - 2,647,412
Land improvements (depreciable) 4,097,024 - 4,097,024
Buildings 17,358,045 11,085,341 28,443,386
Machinery and equipment 12,290,935 3,625,731 15,916,666
Infrastructure:
Other 209,037 - 209,037
Roads 61,178,368 - 61,178,368
Bridges 2,034,591 - 2,034,591
Parking lots 1,298,575 - 1,298,575
Mains and lines and other
improvements
-
139,540,170
139,540,170
Construction in progress 3,453,157 836,114 4,289,271
Accumulated depreciation (27,380,872 ) (59,663,425 ) (87,044,297)
Total capital assets $ 85,146,896 $ 98,152,008 $ 183,298,904
Additional information on the City's capital assets can be found in Note IV.C. on pages 37 -38 of this
report.
Page 10
Long-term debt
At the end of the current fiscal year, the City had total bonded debt outstanding of $12,345,000 (including
debt recorded in the Port Authority). Of this amount, $3,460,000 was for general obligation improvement
debt which has financed special assessment construction as part the continuing development within the
City. An additional $6,025,000 was general obligation debt issued by the Port Authority which financed
the City's economic development and redevelopment programs. Another $1,645,000 was general
obligation revenue bond debt issued to add to and improve the water and storm water utility systems
within the City. The remaining $1,215,000 was general obligation refunding debt (for Fire Station 2).
The City's total debt decreased by $4,905,000 (approximately 28%) during the current year, however
$3,275,000 of that decrease related to payment of refunded debt to an escrow account in 2017.
Cities in Minnesota may issue general obligation debt up to a maximum of three percent of the total
estimated market value of property within the City, per state statutes. The current debt limit for the City is
$73,042,918. Of the City's $12,345,000 in outstanding general obligation debt at the current fiscal year
end, $1,215,000 is subject to the restrictions placed by state statute.
The City received a S&P Global Ratings bond rating of AA+ for bonds issued in 2017, which amount to a
rating upgrade from our Aa2 Moody’s rating for previously issued debt. 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 41-43 of this
report.
Economic Factors
> Dakota County's unemployment rate ended the year at 2.7 percent, which compares favorably
with the state unemployment rate of 3.3 percent, and the national unemploymen t rate of 3.9
percent.
> City building permits were down slightly in quantity and in value in 2017, as compared to 2016. A
total of 3,136 permits with a total valuation of $74,717,882 were issued in 2017.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report
or requests for additional information should be addressed to th e Finance Director, City of Rosemount,
2875 145th Street West, Rosemount, Minnesota 55068-4997.
Business-
Governmental Type
Activities Activities Totals
ASSETS
Cash and investments 28,053,752$ 23,975,501$ 52,029,253$
Receivables
Taxes 676,694 - 676,694
Delinquent taxes 44,119 - 44,119
Accounts 238,485 1,293,791 1,532,276
Special assessments 1,724,204 210,407 1,934,611
Due from other governmental units 11,861 241,190 253,051
Internal balances (22,857) 22,857 -
Prepaid items 92,911 123,661 216,572
Net pension asset 1,246,634 - 1,246,634
Capital assets
Land 7,960,624 2,728,077 10,688,701
Construction in progress 3,453,157 836,114 4,289,271
Land improvements 6,744,436 - 6,744,436
Buildings 17,358,045 11,085,341 28,443,386
Machinery and equipment 12,290,935 3,625,731 15,916,666
Infrastructure 64,720,571 139,540,170 204,260,741
Less: accumulated depreciation (27,380,872) (59,663,425) (87,044,297)
Total Assets 117,212,699 124,019,415 241,232,114
DEFERRED OUTFLOWS OF RESOURCES
Pension related amounts 4,895,322 275,410 5,170,732
LIABILITIES
Accounts payable 850,754 253,302 1,104,056
Accrued payroll and payroll taxes 255,073 66,485 321,558
Other accrued liabilities and deposits 1,172,169 18,656 1,190,825
Noncurrent liabilities
Net pension liability 5,922,358 1,001,327 6,923,685
Due within one year 1,866,198 482,136 2,348,334
Due in more than one year 9,968,328 1,428,876 11,397,204
Total Liabilities 20,034,880 3,250,782 23,285,662
DEFERRED INFLOWS OF RESOURCES
Contributions received for subsequent year 1,047,503 - 1,047,503
Pension related amounts 5,489,855 194,672 5,684,527
Total Deferred Inflows of Resources 6,537,358 194,672 6,732,030
NET POSITION
Net investment in capital assets 74,294,033 97,328,281 171,622,314
Restricted for debt service 5,883,329 - 5,883,329
Restricted for pension 1,246,634 - 1,246,634
Restricted PEG fees 21,759 - 21,759
Unrestricted 14,090,028 23,521,090 37,611,118
TOTAL NET POSITION 95,535,783$ 120,849,371$ 216,385,154$
CITY OF ROSEMOUNT
STATEMENT OF NET POSITION
As of December 31, 2017
See accompanying notes to financial statements.
Page 11
Program Revenues
Operating Capital
Charges for Grants and Grants and Governmental Business-Type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Totals
Primary Government:
Governmental activities:
General government 3,859,090$ 3,286,273$ 1,509$ -$ (571,308)$ -$ (571,308)$
Public safety 5,170,637 134,893 366,654 6,358 (4,662,732) - (4,662,732)
Public works 5,822,738 100,038 42,495 3,538,480 (2,141,725) - (2,141,725)
Culture, education and recreation 2,042,299 779,541 1,337 293 (1,261,128) - (1,261,128)
Conservation and economic development 4,315 - 25,000 33,629 54,314 - 54,314
Interest and fiscal charges 308,567 - - - (308,567) - (308,567)
Total Governmental Activities 17,207,646 4,300,745 436,995 3,578,760 (8,891,146) - (8,891,146)
Business-Type activities
Water 2,175,626 3,041,642 84,042 216,454 - 1,166,512 1,166,512
Sewer 2,837,550 2,126,771 - 204,114 - (506,665) (506,665)
Storm Water 1,275,073 1,693,845 - 210,802 - 629,574 629,574
Arena 484,903 441,059 - - - (43,844) (43,844)
Total Business-Type Activities 6,773,152 7,303,317 84,042 631,370 - 1,245,577 1,245,577
Total Primary Government 23,980,798$ 11,604,062$ 521,037$ 4,210,130$ (8,891,146) 1,245,577 (7,645,569)
General revenues:
Taxes
Property taxes, levied for general purposes 11,139,036 - 11,139,036
Property taxes, levied for debt service 1,178,589 - 1,178,589
Other taxes 366,745 - 366,745
Interest earnings 307,497 295,867 603,364
Change in fair value of investments (20,104) (26,236) (46,340)
Miscellaneous 171,294 - 171,294
Transfers 1,127,581 (1,127,581) -
Total general revenues and transfers 14,270,638 (857,950) 13,412,688
Change in net position 5,379,492 387,627 5,767,119
NET POSITION - Beginning $90,156,291 $120,461,744 $210,618,035
NET POSITION - ENDING 95,535,783$ 120,849,371$ 216,385,154$
Primary Government
Changes in Net Position
Net (Expense) Revenue and
CITY OF ROSEMOUNT
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2017
See accompanying notes to financial statements.
Page 12
Port Nonmajor Total
Authority Governmental Governmental
General Debt Service Capital Projects TIF Funds Funds
ASSETS
Cash and investments 10,130,901$ 3,207,898$ 12,253,924$ 1,847,142$ 247,063$ 27,686,928$
Receivables from:
Taxes 718,900 - - 1,913 - 720,813
Accounts 29,468 - 203,857 - 5,160 238,485
Special assessments 3,375 1,181,403 538,339 - - 1,723,117
Delinquent special assessments 70 - 1,017 - - 1,087
Due from other governmental units 11,861 - - - - 11,861
Prepaid items - - - - 444 444
TOTAL ASSETS 10,894,575$ 4,389,301$ 12,997,137$ 1,849,055$ 252,667$ 30,382,735$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable 488,281$ -$ 288,538$ -$ 302$ 777,121$
Accrued payroll and payroll taxes 255,073 - - - - 255,073
Deposits payable 483,105 - 559,054 - - 1,042,159
Advances from other funds - - 22,857 - - 22,857
Total Liabilities 1,226,459 - 870,449 - 302 2,097,210
Deferred Inflows of Resources
Unavailable revenue 111,866 1,181,263 499,450 - - 1,792,579
Contributions received for subsequent year - 224,690 822,813 - - 1,047,503
Total Deferred Inflows of Resources 111,866 1,405,953 1,322,263 - - 2,840,082
Fund Balances
Nonspendable - - - - 444 444
Restricted - 2,983,348 - 1,849,055 21,759 4,854,162
Committed - - - - 230,162 230,162
Assigned 2,222,507 - 10,804,425 - - 13,026,932
Unassigned 7,333,743 - - - - 7,333,743
Total Fund Balances 9,556,250 2,983,348 10,804,425 1,849,055 252,365 25,445,443
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 10,894,575$ 4,389,301$ 12,997,137$ 1,849,055$ 252,667$
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.85,146,896
Some receivables that are not currently available are reported as deferred inflows of resources in the fund financial
statements but are recognized as revenue when earned in the government-wide statements.1,792,579
Internal service funds are reported in the statement of net position as governmental activities.385,658
The net pension asset does not relate to current financial resources and is not reported in the governmental funds.1,246,634
The net pension liability does not relate to current financial resources and is not reported in the governmental funds.(5,922,358)
Deferred outflows of resources related to pensions do not relate to current financial resources and is not reported
in the governmental funds.4,895,322
Deferred inflows of resources related to pensions do not relate to current financial resources and is not reported
in the governmental funds.(5,489,855)
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.(11,964,536)
NET POSITION OF GOVERNMENTAL ACTIVITIES 95,535,783$
CITY OF ROSEMOUNT
BALANCE SHEET - GOVERNMENTAL FUNDS
As of December 31, 2017
See accompanying notes to financial statements.
Page 13
Port Nonmajor Total
Authority Governmental Governmental
General Debt Service Capital Projects TIF Funds Funds
REVENUES
Taxes 9,750,637$ 346,056$ 1,415,400$ 832,533$ 79,744$ 12,424,370$
Intergovernmental 417,036 - 766,685 - 32,479 1,216,200
Public charges for services 1,369,766 - 2,071,914 - 15,573 3,457,253
Licenses and permits 741,243 - - - - 741,243
Fines and forfeitures 101,327 - - - - 101,327
Special assessments 345 215,395 502,311 - - 718,051
Interest earnings 163,932 14,503 108,370 17,030 - 303,835
Change in fair value of investments (10,444) - (8,843) (817) - (20,104)
Donations/contributions - - 855 - - 855
Miscellaneous 136,103 - 1,125,034 - 942 1,262,079
Total Revenues 12,669,945 575,954 5,981,726 848,746 128,738 20,205,109
EXPENDITURES
Current:
General government 3,035,701 - 8,454 157,733 51,920 3,253,808
Public safety 4,306,808 - - - - 4,306,808
Public works 3,900,699 - 240,476 - - 4,141,175
Parks and recreation 1,546,723 - - - - 1,546,723
Capital Outlay 68,105 - 5,539,699 63,169 5,842 5,676,815
Debt Service:
Principal retirement - 2,010,000 - 230,000 - 2,240,000
Interest and fiscal charges - 107,472 9,223 267,849 - 384,544
Total Expenditures 12,858,036 2,117,472 5,797,852 718,751 57,762 21,549,873
Excess (deficiency) of revenues
over expenditures (188,091) (1,541,518) 183,874 129,995 70,976 (1,344,764)
OTHER FINANCING SOURCES (USES)
Issuance of long-term debt - - 1,055,000 - - 1,055,000
Premium on long-term debt - - 61,287 - - 61,287
Payment of refunded debt to escrow agent - - - (3,275,000) - (3,275,000)
Sale of capital assets - - 42,394 - - 42,394
Transfers in 3,721 267,695 1,472,329 - - 1,743,745
Transfers out (147,914) (50,020) (418,230) - - (616,164)
Total Other Financing Sources (Uses)(144,193) 217,675 2,212,780 (3,275,000) - (988,738)
Net Change in Fund Balances (332,284) (1,323,843) 2,396,654 (3,145,005) 70,976 (2,333,502)
FUND BALANCES - Beginning 9,888,534 4,307,191 8,407,771 4,994,060 181,389 27,778,945
FUND BALANCES - ENDING 9,556,250$ 2,983,348$ 10,804,425$ 1,849,055$ 252,365$ 25,445,443$
CITY OF ROSEMOUNT
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2017
See accompanying notes to financial statements.
Page 14
CITY OF ROSEMOUNT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2017
Net change in fund balances - total governmental funds (2,333,502)$
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 position 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 5,676,815
Some items reported as capital outlay but not capitalized (254,198)
Capital contributions from external parties 214,616
Depreciation is reported in the government-wide statements (2,357,213)
In the statement of activities, the loss of ($25,024) on the disposal of
capital assets is reported. In the fund financial statements, proceeds from the sale
of capital assets ($42,394) are reported because the proceeds increase
financial resources (67,418)
Internal service funds are reported in the statement of activities.(180,621)
Receivables not currently available are reported as unavailable revenue in the fund financial
statements but are recognized as revenue when earned in the government-wide
financial statements.695,242
Issuing debt provides current financial resources to governmental funds, but issuing
debt increases long-term liabilities in the statement of net position. This is the amount of
debt issued during the year.(1,055,000)
Repayment of debt principal is an expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the statement of net position. This is the amount
of principal payments paid.5,515,000
Governmental funds report the effect of premiums and discounts, and similar
items when debt is first issued, whereas these amounts were amortized in the
statement of activities.13,887
Some expenses in the statement of activities do not require the use of
current financial resources and, therefore, are not reported as expenditures
in the governmental funds. This is the change in the following liabilities.
Compensated absences 437
Accrued interest on debt 62,090
Net pension liability 6,308,318
Net pension asset 245,144
Deferred outflows of resources related to pensions (3,100,603)
Deferred inflows of resources related to pensions (4,003,502)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 5,379,492$
See accompanying notes to financial statements.
Page 15
Governmental
Activities -
Storm Non-major Internal Service
Water Sewer Water Arena Totals Fund
ASSETS
Current Assets
Cash and investments 10,130,881$ 6,421,563$ 6,897,231$ 525,826$ 23,975,501$ 366,824$
Accounts receivable 483,284 461,630 323,667 25,210 1,293,791 -
Special assessments receivable 84,779 86,466 39,162 - 210,407 -
Advance to other funds - 32,381 - - 32,381 -
Due from other governments 77,280 - 163,449 461 241,190 -
Prepaid and other assets 4,650 117,463 1,117 431 123,661 92,467
Total Current Assets 10,780,874 7,119,503 7,424,626 551,928 25,876,931 459,291
Noncurrent Assets
Property and equipment:
Land 1,008,628 547,158 1,172,291 - 2,728,077 -
Construction in progress 811,114 - - 25,000 836,114 -
Buildings 6,794,504 401,414 1,489,523 2,399,900 11,085,341 -
Machinery and equipment 1,867,136 754,572 835,135 168,888 3,625,731 -
Mains and lines 23,314,052 20,121,631 30,113,198 - 73,548,881 -
Other improvements 16,528,701 36,927,459 12,535,129 - 65,991,289 -
Less accumulated depreciation (16,506,712) (30,883,431) (11,109,675) (1,163,607) (59,663,425) -
Net Property and Equipment 33,817,423 27,868,803 35,035,601 1,430,181 98,152,008 -
Total Assets 44,598,297 34,988,306 42,460,227 1,982,109 124,028,939 459,291
DEFERRED OUTFLOWS OF RESOURCES
Pension related amounts 93,787 93,769 44,186 43,668 275,410 -
LIABILITIES
Current Liabilities
Accounts payable 189,484 6,643 39,318 17,857 253,302 73,633
Accrued payroll and payroll taxes 36,194 15,756 7,199 7,336 66,485 -
Accrued interest 17,518 - 1,138 - 18,656 -
Advances from other funds 9,524 - - - 9,524 -
Current portion of long term obligations 318,103 33,103 118,037 12,893 482,136 -
Total Current Liabilities 570,823 55,502 165,692 38,086 830,103 73,633
Noncurrent Liabilities
Net pension liability 339,042 339,031 159,898 163,356 1,001,327 -
General obligation debt 1,329,063 - - - 1,329,063 -
Accrued compensated absences 35,861 35,861 14,124 13,967 99,813 -
Total Noncurrent Liabilities 1,703,966 374,892 174,022 177,323 2,430,203 -
Total Liabilities 2,274,789 430,394 339,714 215,409 3,260,306 73,633
DEFERRED INFLOWS OF RESOURCES
Pension related amounts 66,283 66,247 30,765 31,377 194,672 -
NET POSITION
Net investment in capital assets 33,098,696 27,868,803 34,930,601 1,430,181 97,328,281 -
Unrestricted 9,252,316 6,716,631 7,203,333 348,810 23,521,090 385,658
TOTAL NET POSITION 42,351,012$ 34,585,434$ 42,133,934$ 1,778,991$ 120,849,371$ 385,658$
CITY OF ROSEMOUNT
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
As of December 31, 2017
Business-Type Activities - Enterprise Funds
See accompanying notes to financial statements.
Page 16
Governmental
Activities -
Storm Non-major Internal Service
Water Sewer Water Arena Totals Funds
OPERATING REVENUES
Charges for services 1,970,499$ 1,853,008$ 1,294,443$ 441,059$ 5,559,009$ -$
Surcharges and penalties 327,849 13,768 10,471 - 352,088 -
Water meters 58,045 - - - 58,045 -
Total Operating Revenues 2,356,393 1,866,776 1,304,914 441,059 5,969,142 -
OPERATING EXPENSES
Personnel services 463,400 464,961 217,362 223,790 1,369,513 -
Supplies 199,402 20,226 16,155 28,133 263,916 4,946
Professional services and charges 112,970 28,865 47,876 31,512 221,223 99,307
Other services and charges 533,725 113,833 237,464 143,776 1,028,798 339,707
Metro sewer charges - 1,284,546 - - 1,284,546 -
Depreciation 815,812 925,119 752,701 57,692 2,551,324 -
Total Operating Expenses 2,125,309 2,837,550 1,271,558 484,903 6,719,320 443,960
Operating Income (Loss)231,084 (970,774) 33,356 (43,844) (750,178) (443,960)
NONOPERATING REVENUES (EXPENSES)
Connection fees 685,249 259,995 388,931 - 1,334,175 -
Taxes - - - - - 260,000
Intergovernmental 84,042 - - - 84,042 -
Interest earnings 105,647 87,072 100,928 2,220 295,867 3,339
Change in fair value of investments (7,651) (10,121) (7,377) (1,087) (26,236) -
Loss from disposal of capital assets (9,885) (4,159) - - (14,044) -
Interest expense and fiscal agent fees (36,273) - (3,515) - (39,788) -
Total Nonoperating Revenues 821,129 332,787 478,967 1,133 1,634,016 263,339
Income (loss) before contributions
and transfers 1,052,213 (637,987) 512,323 (42,711) 883,838 (180,621)
Capital contributions, including
special assessments 216,454 204,114 210,802 - 631,370 -
Transfers in - 217,314 56,000 130,000 403,314 -
Transfers out (844,233) (73,316) (609,846) (3,500) (1,530,895) -
Change in Net Position 424,434 (289,875) 169,279 83,789 387,627 (180,621)
TOTAL NET POSITION - Beginning 41,926,578 34,875,309 41,964,655 1,695,202 120,461,744 566,279
TOTAL NET POSITION - ENDING 42,351,012$ 34,585,434$ 42,133,934$ 1,778,991$ 120,849,371$ 385,658$
Business-Type Activities - Enterprise Funds
CITY OF ROSEMOUNT
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
For the Year Ended December 31, 2017
See accompanying notes to financial statements.
Page 17
Governmental
Activities -
Storm Non major Internal
Water Sewer Water Arena Totals Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 2,997,901$ 2,022,302$ 1,601,263$ 470,345$ 7,091,811$ -$
Cash paid to suppliers for goods and services (756,601) (1,464,783) (302,143) (204,601) (2,728,128) (360,047)
Cash paid for employees (463,400) (464,961) (217,362) (223,031) (1,368,754) -
Net Cash Flows From (Used by) Operating Activities 1,777,900 92,558 1,081,758 42,713 2,994,929 (360,047)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Property taxes - - - - - 260,000
Repayment of advance to other funds - 30,839 - - 30,839 -
Repayment of advance from other funds (9,070) - - - (9,070) -
Repayment of advance to other governmental units - - 54,483 - 54,483 -
Transfers from other funds - 217,314 56,000 130,000 403,314 -
Transfers to other funds (844,233) (73,316) (609,846) (3,500) (1,530,895) -
Net Cash Flows From (Used by) Noncapital Financing Activities (853,303) 174,837 (499,363) 126,500 (1,051,329) 260,000
CASH FLOWS FROM INVESTING ACTIVITIES
Marketable securities purchased (4,492,651) (1,845,121) (3,242,377) (270,000) (9,850,149) -
Marketable securities sold 2,756,613 1,454,123 2,354,627 - 6,565,363 -
Interest earnings 105,647 87,072 100,928 2,220 295,867 3,339
Net Cash Flows From (Used by) Investing Activities (1,630,391) (303,926) (786,822) (267,780) (2,988,919) 3,339
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Debt retired (270,000) - (175,000) - (445,000) -
Interest paid (47,648) - (5,192) - (52,840) -
Acquisition and construction of capital assets (97,315) (67,310) (119,996) (114,253) (398,874) -
Contribution received for construction 30,107 107,888 56,788 - 194,783 -
Net Cash Flows From (Used by) Capital and Related Financing Activities (384,856) 40,578 (243,400) (114,253) (701,931) -
Net Increase (Decrease) in Cash and Cash Equivalents (1,090,650) 4,047 (447,827) (212,820) (1,747,250) (96,708)
CASH AND CASH EQUIVALENTS - Beginning of Year 3,255,434 653,099 476,536 469,733 4,854,802 271,532
CASH AND CASH EQUIVALENTS - END OF YEAR 2,164,784$ 657,146$ 28,709$ 256,913$ 3,107,552$ 174,824$
RECONCILIATION OF CASH AND CASH EQUIVALENTS
Cash and Investments per Statement of Net Position 10,130,881$ 6,421,563$ 6,897,231$ 525,826$ 23,975,501$ 366,824$
Less: Non Cash Equivalents (7,966,097) (5,764,417) (6,868,522) (268,913) (20,867,949) (192,000)
CASH AND CASH EQUIVALENTS PER STATEMENT OF CASH FLOWS 2,164,784$ 657,146$ 28,709$ 256,913$ 3,107,552$ 174,824$
Business-Type Activities - Enterprise Funds
CITY OF ROSEMOUNT
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For the Year Ended December 31, 2017
See accompanying notes to financial statements.
Page 18
Governmental
Activities -
Water Sewer Storm Non major Internal
Utility Utility Water Arena Totals Service Funds
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH
FLOWS FROM (USED BY) OPERATING ACTIVITIES
Operating income (loss)231,084$ (970,774)$ 33,356$ (43,844)$ (750,178)$ (443,960)
Nonoperating income 769,291 259,995 388,931 - 1,418,217 -
Adjustments to Reconcile Operating (Loss) to Net Cash Flows
From (Used by) Operating Activities
Noncash items included in income
Depreciation 815,812 925,119 752,701 57,692 2,551,324 -
Change in assets and liabilities
Accounts receivable (127,783) (104,469) (92,582) (641) (325,475) -
Other receivables - - - 29,927 29,927 -
Prepaid items 6,251 360 4,430 4,413 15,454 72,148
Accounts payable 92,452 (12,938) (6,505) (2,277) 70,732 11,765
Other current liabilities (12,340) (7,866) 1,345 (429) (19,290) -
Accrued liabilities 7,784 7,787 3,247 (3,433) 15,385 -
Pension related deferrals and liabilities (4,651) (4,656) (3,165) 1,305 (11,167) -
NET CASH FLOWS FROM (USED BY) OPERATING ACTIVITIES 1,777,900$ 92,558$ 1,081,758$ 42,713$ 2,994,929$ (360,047)$
NONCASH CAPITAL, INVESTING AND FINANCING ACTIVITIES
The Water Utility received contributed plant of $110,870 during the year. The Sewer Utility received contributed plant of $117,573 during the year.
The Storm Water Utility received contributed plant of $156,804 during the year.
Construction in progress included in the Water Utility accounts payable was $24,883.
Unrealized loss on investments were $7,651 for the Water Utility, $10,121 for the Sewer Utility, $7,377 for the Storm Water Utility and $1,087 for the Arena for the year.
Business-Type Activities - Enterprise Funds
See accompanying notes to financial statements.
Page 19
CITY OF ROSEMOUNT
INDEX TO NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 20
NOTE Page
I. Summary of Significant Accounting Policies 21
A. Reporting Entity 21
B. Government-Wide and Fund Financial Statements 22
C. Measurement Focus, Basis of Accounting,
and Financial Statement Presentation 24
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows
of Resources, and Net Position or Equity 25
1. Deposits and Investments 25
2. Receivables 26
3. Inventories and Prepaid Items 27
4. Capital Assets 28
5. Deferred Outflows of Resources 28
6. Compensated Absences 29
7. Long-Term Obligations/Conduit Debt 29
8. Deferred Inflows of Resources 29
9. Equity Classifications 30
10. Basis for Existing Rates 31
11. Pension 31
II. Reconciliation of Government-Wide and Fund Financial Statements 32
A. Explanation of Certain Differences Between the
Governmental Funds Balance Sheet and the Statement of Net Position 32
III. Stewardship, Compliance, and Accountability 32
A. Budgetary Information 32
IV. Detailed Notes on All Activities and Funds 33
A. Deposits and Investments 33
B. Receivables 36
C. Capital Assets 37
D. Interfund Advances and Transfers 39
E. Long-Term Obligations 41
F. Net Position/Fund Balances 44
V. Other Information 46
A. Employees’ Retirement System 46
B. Risk Management 59
C. Commitments and Contingencies 60
D. Effect of New Accounting Standards on Current-Period Financial Statements 61
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 21
NOTE I – 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 is the Governmental
Accounting Standards Board (GASB).
A. REPORTING ENTITY
This report includes all of the funds of the City. The reporting entity for the City consists of the primary
government and its component unit. Component units are legally separate organizations for which the
primary government is financially accountable or 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. The primary government is financially
accountable if (1) it appoints a voting majority of the organization’s governing body and it is able to
impose its will on that organization, (2) it appoints a voting majority of the organization’s governing body
and there is a potential for the organization to provide specific financial benefits to, or impose specific
financial burdens on, the primary government, (3) the organization is fiscally dependent on and there is a
potential for the organization to provide specific financial benefits to, or impose specific financial burdens
on, the primary government. Certain legally separate, tax exempt organizations should also be reported
as a component unit 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 or its component units,
is entitled to, or has the ability to access, a majority of the economic resources received or held by the
separate organization; and (3) the economic resources received or held by an individual organization
that the primary government, or its component units, is entitled to, or has the ability to otherwise access,
are significant to the primary government.
Component units are reported using one of two methods, discrete presentation or blending. Generally,
component units should be discretely presented in a separate column in the financial statements. A
component unit should be reported as part of the primary government using the blending method if it
meets any one of the following criteria: (1) the primary government and the component unit have
substantially the same governing body and a financial benefit or burden relationship exists, (2) the
primary government and the component unit have substantially the same governing body and
management of the primary government has operational responsibility for the component unit, (3) the
component unit serves or benefits, exclusively or almost exclusively, the primary government rather than
its citizens, or (4) the total debt of the component unit will be paid entirely or almost entirely from
resources of the primary government. The financial statements include the Rosemount Port Authority as
a blended component unit. The Port Authority serves all the citizens of the government and is governed
by a board comprised of three of five of the primary government’s elected council and four citizens
appointed at large. The bond issuance authorizations are approved by the primary government’s council
and the legal liability for the general obligation portion of the Port Authority’s debt remains with the
primary government. The Port Authority is reported in a special revenue fund and debt service fund. The
Rosemount Port Authority does not issue separate financial statements.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 22
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Government-Wide Financial Statements
The statement of net position and statement of activities display information about the reporting
government as a whole. They include all funds of the reporting entity. 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 directed resources are reported as general revenues rather
than as program revenues.
Fund Financial Statements
Financial statements of the City 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, deferred outflows or resources, liabilities, deferred inflows of resources, net
position/fund equity, revenues, and expenditures/expenses.
Funds are organized as major funds or nonmajor 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/deferred outflows of resources, liabilities/deferred inflows of resources, revenues, or
expenditures/expenses of that individual governmental or enterprise fund are at least 10% 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% test is
at least 5% 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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 23
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.)
Fund Financial Statements (cont.)
Separate financial statements are provided for governmental funds and proprietary funds. Major individual
governmental funds and major individual enterprise funds are reported as separate columns in the fund
financial statements.
The City reports the following major governmental funds:
General Fund – accounts for the City’s primary operating activities. It is used to account for and
report all financial resources except those accounted for and reported in another fund.
Debt Service Fund – used to account for and report financial resources that are restricted,
committed, or assigned to expenditure for the payment of general long-term debt principal,
interest, and related costs, other than enterprise debt.
Capital Projects Fund – used to account for and report financial resources that are restricted,
committed, or assigned to expenditures for capital outlays, including the acquisition or
construction of capital facilities and other capital assets. The capital projects fund consists of
one primary fund and three separate internal funds maintained by the City.
Port Authority TIF Fund – used to account for and report financial resources that are restricted,
committed, or assigned to expenditures related to the activities of the City’s Downtown –
Brockway TIF District.
The City reports the following major enterprise funds:
Water – accounts for operations of the water system.
Sewer – accounts for operations of the sewer system.
Storm Water – 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 and report the proceeds of specific revenue
sources that are restricted or committed to expenditures for specified purposes (other than debt
service or capital projects).
PEG Fees
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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 24
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.)
Fund Financial Statements (cont.)
In addition, the City reports the following fund types:
Internal service funds are used to account for the financing of goods and services provided by
one department or agency to other departments or agencies of the City on a cost-
reimbursement basis.
Insurance Fund – accumulates resources to pay deductibles and uninsured claims, and
pays for a majority of the general liability insurance and workers compensation insurance
premiums for the City.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
Government-Wide Financial Statements
The government-wide statement of net position 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 levied. Unbilled receivables are recorded as revenues
when services are provided.
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.
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 amounts are due and payable.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 25
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (cont.)
Fund Financial Statements (cont.)
Property taxes, special assessments, intergovernmental revenues, charges for services and interest
associated with the current fiscal period are all considered to susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Only the portion of special assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only when cash is received
by the City.
Proprietary fund financial statements are reported using the economic resources measurement focus and
the accrual basis of accounting, as described previously in this note.
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.
Operating expenses for proprietary funds include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
All Financial Statements
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,
deferred outflows of resources, liabilities, and deferred inflows of resources 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, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION OR EQUITY
1. Deposits and Investments
For purposes of the statement of cash flows, the City considers all highly liquid investments with an initial
maturity of three months or less when acquired to be cash equivalents.
Investment of City funds is restricted by state statutes. Available investments are limited to:
a. 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.
b. General obligations of the State of Minnesota or any of its municipalities.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 26
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION OR EQUITY (cont.)
1. Deposits and Investments (cont.)
c. Bankers acceptances of United States banks eligible for purchase by the Federal Reserve System.
d. 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.
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 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. The
difference between the bank statement balance and carrying value is due to outstanding checks and/or
deposits in transit.
See Note IV.A. for further information.
2. Receivables
Property tax levies are set by the City Council in the fall each year and are certified to Dakota County for
collection in the following year. In Minnesota, counties act as collection agents for all property taxes.
The County spreads all levies over taxable property. Such taxes become a lien on January 1 and are
recorded as receivables by the City at that date. Property taxes are accrued and recognized as revenue in
the year collectible, net of delinquencies.
Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15.
Personal property taxes may be paid on February 28 and June 30. The County provides tax settlements to
the City three times per year, in January, July, and December.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 27
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION 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 unavailable revenue (deferred inflow of resources) in the governmental fund financial
statements 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.
Unavailable - 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 position. 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
nonspendable fund balance account which indicates that they do not constitute expendable available
financial resources and, therefore, are not available for appropriation or by a restricted fund balance
account, if the funds will ultimately be restricted when the advance is repaid.
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 and expensed as the items are
used (consumption method).
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 28
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION 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 acquisition 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 position. 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
Land, some land improvements, and construction work in progress are not depreciated.
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.
5. Deferred Outflows of Resources
A deferred outflow of resources represents a consumption of net position/fund balance that applies to a
future period and will not be recognized as an outflow of resources (expense/expenditure) until that future
time.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 29
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION OR EQUITY (cont.)
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, 2017 are determined on
the basis of current salary rates and include salary related payments.
7. Long-Term Obligations/Conduit Debt
All long-term obligations to be repaid from governmental and business-type resources are reported as
liabilities in the government-wide statements. The long-term obligations consist primarily of notes and
bonds payable, accrued compensated absences, and net pension liability.
Long-term obligations for governmental funds are not reported as liabilities in the fund financial
statements. The face value of debts (plus or minus any premiums or discounts) are reported as another
financing source 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.
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 four issues
outstanding could not be determined; however, their original issue amounts totaled $13,094,720.
8. Deferred Inflows of Resources
A deferred inflow of resources represents an acquisition of net position that applies to a future period and
therefore will not be recognized as inflow of resources (revenue) until that future time.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 30
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION OR EQUITY (cont.)
9. Equity Classifications
Government–Wide Statements
Equity is classified as net position and displayed in three components:
a. Net investment in capital assets - Consists of capital assets including restricted capital assets,
net of accumulated depreciation and reduced by the outstanding balances (excluding 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 position - Consists of net position 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 position - All other net positions that do not meet the definitions of “restricted”
or “net investment in capital assets.”
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 balances are displayed as follows:
a. Nonspendable - Includes fund balance amounts that cannot be spent either because they are
not in spendable form or because legal or contractual requirements require them to be
maintained intact.
b. Restricted - Consists of fund balances 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. Committed - Includes fund balance amounts that are constrained for specific purposes that are
internally imposed by the government through formal action of the highest level of decision
making authority. Fund balance amounts are committed through a formal action (resolution) of the
City Council. This formal action must occur prior to the end of the reporting period, but the amount
of the commitment, which will be subject to the constraints, may be determined in the subsequent
period. Any changes to the constraints imposed require the same formal action of the City Council
that originally created the commitment.
d. Assigned - Includes spendable fund balance amounts that are intended to be used for specific
purposes that do not meet the criteria to be classified as restricted or committed. The City Council
has authorized the Finance Director and/or Administrator to assign amounts for a specific
purpose. Assignments may take place after the end of the reporting period.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 31
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND NET POSITION OR EQUITY (cont.)
9. Equity Classifications (cont.)
Fund Statements (cont.)
e. Unassigned - Includes residual positive fund balance within the general fund which has not been
classified within the other above mentioned categories. Unassigned fund balance may also
include negative balances for any governmental fund if expenditures exceed amounts restricted or
committed for those purposes.
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance
is available unless there are legal documents / contracts that prohibit doing this, such as in grant
agreements requiring dollar for dollar spending. Additionally, the City would first use committed, then
assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made.
The City has a formal minimum fund balance policy. That policy is to maintain a working capital fund of 45
to 55 percent of the subsequent year’s general fund budgeted expenditures. The balance at year end was
$7,333,743, or 56 percent, and is included in unassigned general fund balance.
Proprietary fund equity is classified the same as in the government-wide statements.
10. Basis for Existing Rates
Current utility rates were approved by the City Council on December 20, 2016.
11. Pension
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension
expense, information about the fiduciary net position of the Public Employees Retirement Association
(PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the
same basis as they are reported by PERA except that PERA’s fiscal year end is June 30. For this
purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and
refunds are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
The PERA has a special funding situation created by a direct aid contribution made by the state of
Minnesota. The direct aid is a result of the merger of the Minneapolis Employees Retirement Fund into the
PERA on January 1, 2015.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 32
NOTE II – RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUNDS BALANCE SHEET AND
THE STATEMENT OF NET POSITION
The governmental fund balance sheet includes a reconciliation between fund balance – total
governmental funds and net position – governmental activities as reported in the government-wide
statement of net position. One element of that reconciliation explains that “Some liabilities, including long-
term debt, are not due and payable in the current period and, therefore, are not reported in the funds”. The
details of this $11,964,536 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 position.
Bonds and notes payable $ 10,700,000
Compensated absences 981,663
Unamortized premium on bonds payable 152,863
Accrued interest 130,010
Combined Adjustment for Long-Term Liabilities $ 11,964,536
NOTE III – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
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
$8,653,858.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 33
NOTE IV – DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
The City maintains a cash and investment pool that is available for use by all funds. Each fund type’s
portion of this pool is displayed on the statement of net position 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:
Carrying
Value
Statement
Balances
Associated
Risks
Petty cash and cash on hand $ 2,400 $ 2,400 N/A
Demand deposits 17,293,478 18,113,201 Custodial credit risk
Negotiable CDs
14,578,280
14,578,280
Custodial credit risk,
credit, concentration of
credit, interest rate risk
US Agencies
20,155,095
20,155,095
Custodial credit, credit,
concentration of credit,
interest rate risk
Total Cash and Investments $ 52,029,253 $ 52,848,976
Reconciliation to the financial statements
Per statement of net position
Cash and investments $ 52,029,253
Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for time and
savings accounts (including NOW accounts) and $250,000 for demand deposit accounts (interest -bearing
and noninterest-bearing). In addition, if deposits are held in an institution outside of the state in which the
government is located, insured amounts are further limited to a total of $250,000 for the combined amount
of all deposit accounts.
The Securities Investor Protection Corporation (SIPC), created by the Securities Investor Protection Act of
1970, is an independent government-sponsored corporation (not an agency of the U.S. government).
SIPC membership provides account protection up to a maximum of $500,000 per customer, of which
$100,000 may be in cash.
The City categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair
value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs
are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 34
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
A. DEPOSITS AND INVESTMENTS (cont.)
The market approach valuation method and matrix pricing techniques are used for recurring fair value
measurements of the US Agency bonds and negotiable certificates of deposit.
December 31, 2017
Investment Type Level 1 Level 2 Level 3 Total
US Agencies $ - $ 20,155,095 $ - $ 20,155,095
Negotiable CDs - 14,578,280 - 14,578,280
Totals $ - $ 34,733,375 $ - $ 34,733,375
Custodial Credit Risk
Deposits
Custodial credit risk is the risk that 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, 2017, the banks had pledged
various government securities in the amount of $18,250,425 to secure the City’s deposits.
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.
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, 2017, the City of Rosemount’s investments in U.S. agency obligations received AA+
and/or AAA ratings from Standard & Poor’s and/or Moody’s Investors Service, respectively.
The City also had investments in negotiable certificates of deposit which were unrated.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 35
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
A. DEPOSITS AND INVESTMENTS (cont.)
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, 2017, the City of Rosemount’s investment portfolio was concentrated as follows:
Issuer Investment Type Percentage of Total
Federal Home Loan Bank US Agencies 24%
Federal Home Loan Mortgage Corporation US Agencies 11%
Federal Farm Credit Bank US Agencies 6%
Federal National Mortgage Association US Agencies 13%
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, 2017, the City of Rosemount’s investments were as follows:
Investment Maturities (in years)
Investment Type
Total Fair
Value
Less
than 1 1 - 5 6 - 10
US Agencies $ 20,155,095 $ $ 14,601,152 $ 5,553,943
Negotiable CDs 14,578,280 1,733,280 12,360,000 485,000
Totals $ 34,733,375 $ 1,733,280 $ 26,961,152 $ 6,038,943
At December 31, 2017, the City held $9,006,583 in US Agency Obligations that are callable at increasing
stepped interest rates.
See Note I.D.1 for further information on deposit and investment policies.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 36
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
B. RECEIVABLES
Receivable amounts not expected to be collected within one year are listed below:
Governmental Activities General
Debt
Service
Capital
Projects Totals
Amounts not expected to be collected
within one year $ 1,688 $ 590,880 $ 269,251 $ 861,819
Business-Type Activities
Water
Utility
Sewer
Utility
Storm Water
Utility Totals
Amounts not expected to be collected
within one year $ 42,402 $ 43,246 $ 74,070 $ 159,718
Governmental funds report unavailable or unearned 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 unavailable revenue and unearned revenue
reported in the governmental funds were as follows:
Unavailable Unearned Totals
Delinquent property taxes receivable $ 44,119 $ - $ 44,119
Delinquent special assessments 947 - 947
Special assessments not yet due 1,683,211 1,047,503 2,730,714
Donations receivable for future projects 64,302 - 64,302
Total Unearned/Unavailable Revenue
for Governmental Funds $ 1,792,579 $ 1,047,503 $ 2,840,082
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 37
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2017 was as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental Activities
Capital assets not being depreciated
Land $ 7,960,624 $ - $ - $ 7,960,624
Land improvements 2,356,397 291,015 - 2,647,412
Construction in progress 1,552,447 3,867,223 1,966,513 3,453,157
Total Capital Assets
Not Being Depreciated 11,869,468 4,158,238 1,966,513 14,061,193
Capital assets being depreciated
Land improvements 3,891,036 220,785 14,797 4,097,024
Buildings 17,202,617 155,428 - 17,358,045
Machinery and equipment 11,734,309 1,313,507 756,881 12,290,935
Infrastructure:
Other 209,037 - - 209,037
Roads 60,166,206 1,012,162 - 61,178,368
Bridges 2,034,591 - - 2,034,591
Parking lots 580,449 743,626 25,500 1,298,575
Total Capital Assets Being Depreciated 95,818,245 3,445,508 797,178 98,466,575
Less: Accumulated depreciation for
Land improvements (1,452,854 ) (171,247 ) 14,797 (1,609,304 )
Buildings (5,303,730 ) (343,804 ) - (5,647,534 )
Machinery and equipment (6,765,611 ) (750,170 ) 697,793 (6,817,988 )
Infrastructure:
Other (14,592 ) (5,336 ) - (19,928 )
Roads (11,431,313 ) (1,006,908 ) - (12,438,221 )
Bridges (530,700 ) (50,865 ) - (581,565 )
Parking lots (254,619 ) (28,883 ) 17,170 (266,332 )
Total Accumulated Depreciation (25,753,419 ) (2,357,213 ) 729,760 (27,380,872 )
Net Capital Assets
Being Depreciated 70,064,826 1,088,295 67,418 71,085,703
Total Governmental Activities
Capital Assets, Net of
Accumulated Depreciation $ 81,934,294
$ 5,246,533
$ 2,033,931
$ 85,146,896
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 38
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS (cont.)
Depreciation expense was charged to functions as follows:
Governmental Activities
General government $ 310,634
Public safety 288,030
Public works, which includes the depreciation of roads, bridges and parking lots 1,438,771
Culture, education and recreation 319,778
Total Governmental Activities Depreciation Expense $ 2,357,213
Beginning Ending
Balance Additions Deletions Balance
Business-Type Activities
Capital assets not being depreciated
Land $ 2,683,777 $ 44,300 $ - $ 2,728,077
Construction in progress 744,907 560,111 468,904 836,114
Total Capital Assets
Not Being Depreciated 3,428,684 604,411 468,904 3,564,191
Capital assets being depreciated
Buildings 11,085,341 - - 11,085,341
Machinery and equipment 3,431,509 332,552 138,330 3,625,731
Infrastructure - mains and lines and other
improvements
139,199,225
340,945
-
139,540,170
Total Capital Assets
Being Depreciated 153,716,075 673,497 138,330 154,251,242
Less: Accumulated depreciation for
Buildings (3,644,309 ) (248,615) - (3,892,924 )
Machinery and equipment (2,113,804 ) (167,313) 124,286 (2,156,831 )
Infrastructure - mains and lines and other
improvements
(51,478,274
)
(2,135,396)
-
(53,613,670
)
Total Accumulated Depreciation (57,236,387 ) (2,551,324) 124,286 (59,663,425 )
Net Capital Assets
Being Depreciated
96,479,688
(1,877,827)
14,044
94,587,817
Total Business-Type
Capital Assets, Net of
Accumulated Depreciation $ 99,908,372 $ (1,273,416) $ 482,948 $ 98,152,008
Depreciation expense was charged to functions as follows:
Business-Type Activities
Water $ 815,812
Sewer 925,119
Storm water 752,701
Arena 57,692
Total Business-type Activities Depreciation Expense $ 2,551,324
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 39
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
D. INTERFUND ADVANCES AND TRANSFERS
Advances
The following is a schedule of interfund advances as of December 31, 2017:
Receivable Fund Payable Fund Amount
Sewer Capital Projects $ 22,857
Sewer Water 9,524
Subtotal – Fund financial statements 32,381
Less: Fund eliminations (9,524 )
Total – Internal Balances Government-Wide Statement of
Net Position
$ 22,857
The principal purpose of these interfund loans was to finance the public works building expansion in
1999, and to purchase and renovate a building in the Downtown-Brockway Tax Increment Financing
District in 2005. All amounts are due within one year.
For the statement of net position, 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:
Principal Interest Totals
2018 $ 32,381 $ 1,619 $ 34,000
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 40
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
D. INTERFUND ADVANCES AND TRANSFERS (cont.)
Transfers
The following is a schedule of interfund transfers:
Fund Transferred To Fund Transferred From Amount Principal Purpose
General Arena $ 3,500 Building and grounds
maintenance
Capital Projects 221 Reimbursement of capital
project costs
Debt Service Water 67,000 Water share of debt payment
Capital Projects 200,695 Reimbursement of capital
project costs
Capital Projects General 17,914 Share of capital project costs
Debt Service 50,020 Close out debt service fund
Water 721,233 Share of capital project costs
Sewer 73,316 Share of capital project costs
Storm Water 609,846 Share of capital project costs
Enterprise
Sewer Capital Projects 217,314 Reimbursement of capital
project costs
Storm Water Water 56,000 Water share of debt payment
Arena General 130,000 Operating expenses
2,147,059
Less: Fund eliminations (1,019,478 )
Total Transfers – Government-Wide
Statement of Activities
$ 1,127,581
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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 41
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG-TERM OBLIGATIONS
Long-term obligations activity for the year ended December 31, 2017 was as follows:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable
General obligation debt $ 15,160,000 $ 1,055,000 $ 5,515,000 $ 10,700,000 $ 1,395,000
Add: Premiums 166,750 61,287 75,174 152,863 -
Sub-totals 15,326,750 1,116,287 5,590,174 10,852,863 1,395,000
Other Liabilities
Vested compensated absences 982,100 470,971 471,408 981,663 471,198
Net pension liability 12,230,676 249,294 6,557,612 5,922,358 -
Total Other Liabilities 13,212,776 720,265 7,029,020 6,904,021 471,198
Total Governmental Activities
Long-Term Liabilities $ 28,539,526 $ 1,836,552 $ 12,619,194 $ 17,756,884 $ 1,866,198
BUSINESS-TYPE ACTIVITIES
Bonds and Notes Payable
General obligation debt $ 2,090,000 $ - $ 445,000 $ 1,645,000 $ 390,000
Add: Premiums 82,292 - 8,229 74,063 -
Sub-totals 2,172,292 - 453,229 1,719,063 390,000
Other Liabilities:
Vested compensated absences 176,564 100,136 84,751 191,949 92,136
Net pension liability 1,338,476 33,001 370,150 1,001,327 -
Total Other Liabilities 1,515,040 133,137 454,901 1,193,276 92,136
Total Business-type Activities
Long-Term Liabilities $ 3,687,332 $ 133,137 $ 908,130 $ 2,912,339 $ 482,136
General Obligation Debt
All general obligation bonds payable are backed by the full faith and credit of the City. 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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 42
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG-TERM OBLIGATIONS (cont.)
General Obligation Debt (cont.)
Governmental Activities Date of Final Interest Original Balance
General Obligation Debt Issue Maturity Rates Indebtedness 12-31-17
Port Authority TIF, Series 2008A 2008 2024 5.0% to 5.5% $ 2,765,000 $ 1,970,000
Port Authority TIF, Crossover Refunding
Bonds, Series 2010B
2010
2022
1.2% to 3.7%
1,355,000
720,000
Improvement Bonds, Series 2012A 2012 2018 0.4% to 1.0% 810,000 165,000
Improvement Bonds, Series 2013A 2013 2019 0.5% to 1.65% 1,500,000 615,000
Improvement Bonds, Series 2014A 2014 2025 0.35% to 2.4% 2,400,000 1,625,000
Fire Station Refunding Bonds, Series 2015B 2015 2025 1.5% to 3.0% 1,345,000 1,215,000
Port Authority TIF Crossover Refunding
Bonds, Series 2015A
2015 2032 3.0% 3,335,000 3,335,000
Improvement Bonds, Series 2017A 2017 2023 3.0% 1,055,000 1,055,000
Total Governmental Activities – General Obligation Debt $ 10,700,000
Business-type Activities Date of Final Interest Original Balance
General Obligation Debt Issue Maturity Rates Indebtedness 12-31-17
Water Revenue Bonds, Series 2007A 2007 2018 4.0% $ 1,210,000 $ 145,000
Utility Rev Refunding Bonds, Series 2010A 2010 2018 0.8% to 2.6% 1,545,000 105,000
Water Revenue Bonds, Series 2015A 2015 2026 1.5% to 3.0% 1,525,000 1,395,000
Total Business-type Activities - General Obligation Debt $ 1,645,000
Debt service requirements to maturity are as follows:
Governmental Activities Business-Type Activities
General Obligation Debt General Obligation Debt
Year Principal Interest Principal Interest
2018 $ 1,395,000 $ 298,816 $ 390,000 $ 39,108
2019 1,445,000 268,513 145,000 31,993
2020 1,190,000 233,730 145,000 28,730
2021 890,000 200,241 150,000 25,043
2022 920,000 166,391 155,000 21,036
2023 - 2027 2,780,00 459,305 660,000 38,860
2028 - 2032 2,080,000 154,200 - -
Totals $ 10,700,000 $ 1,781,196 1,78 $ 1,645,000 $ 184,770
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 43
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG-TERM OBLIGATIONS (cont.)
Other Debt Information
Estimated payments of compensated absences and the net pension liability are not included in the debt
service requirement schedules. The compensated absences liability and net pension 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 revenue bonds issued in 2007, 2010, and 2015. Proceeds from bonds
provided financing for utility improvements. The bonds are payable solely from water and storm water
revenues and are payable through 2026. Annual principal and interest payments on the bonds are
expected to require 6% of net revenues. The total principal and interest remaining to be paid on the bonds
is $1,829,770. Principal and interest paid for the current year and the gross customer revenues were
$497,840 and $4,895,067, respectively.
Crossover Refunding
On November 19, 2015, the City issued $3,335,000 in general obligation bonds with an average coupon
rate of 2.73% to advance refund $3,275,000 of outstanding bonds with an average coupon rate of 4.025%.
The net proceeds were used to purchase U.S. government securities. Those securities were deposited in
an account to provide for future debt service payments on the new bonds until the crossover date.
The cash flow requirements on the refunded debt prior to the advance refunding was $5,014,739 from
2016 through 2032. The cash flow requirements on the refunding bonds are $4,571,096 from 2016
through 2032. The advance refunding resulted in an economic gain (difference between the present
values of the debt service payments on the old and new debt) of $373,276.
On February 1, 2017, the Port Authority TIF, Series 2008B bonds were called and the balance of
$3,275,000 was paid off. The cash and investments held with a fiscal agent from the proceeds of the Port
Authority TIF Crossover Refunding Bonds, Series 2015A, were liquidated to pay off the bonds.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 44
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
F. NET POSITION/FUND BALANCES
Net position reported on the government-wide statement of net position at December 31, 2017 includes
the following:
Governmental Activities
Net Investment in Capital Assets
Land $ 7,960,624
Construction in progress 3,453,157
Other capital assets, net of accumulated depreciation 73,733,115
Less: related long-term debt outstanding (excluding unspent
capital related debt proceeds)
(10,852,863
)
Total Net Investment in Capital Assets $ 74,294,033
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 45
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
F. NET POSITION/FUND BALANCES (cont.)
Governmental Funds
Governmental fund balances reported on the fund financial statements at December 31, 2017 include
the following:
General Fund
Debt
Service
Capital
Projects
Port
Authority
TIF
Nonmajor
Funds Totals
Fund Balances
Nonspendable:
Prepaid items $ - $ - $ - $ - $ 444 $ 444
Restricted for:
Debt service - 2,983,348 - - - 2,983,348
Port Authority TIF - - - 1,849,055 - 1,849,055
PEG Fees - - - - 21,759 21,759
Sub-total - 2,983,348 - 1,849,055 21,759 4,854,162
Committed for:
Fire safety education - - - - 3,030 3,030
GIS - - - - 42,732 42,732
Port authority – general - - - - 184,400 184,400
Sub-total - - - - 230,162 230,162
Assigned for:
Compensated absences 981,663 - - - - 981,663
Health insurance 150,700 - - - - 150,700
Comp plan 10,000 - - - - 10,000
Building maintenance 96,184 - - - - 96,184
Park maintenance 568,544 - - - - 568,544
Election equipment 51,263 - - - - 51,263
Various projects/equipment 364,153 - 7,780,237 - - 8,144,390
Building CIP - - 2,162,123 - - 2,162,123
Street CIP - - 330,748 - - 330,748
Equipment CIP - - 531,317 - - 531,317
Sub-total 2,222,507 - 10,804,425 - - 13,026,932
Unassigned: 7,333,743 - - - - 7,333,743
Total Fund Balances $ 9,556,250 $ 2,983,348 $ 10,804,425 $ 1,849,055 $ 252,365 $ 25,445,443
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 46
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
F. NET POSITION/FUND BALANCES (cont.)
Business-Type Activities
Net Investment in Capital Assets
Land $ 2,728,077
Construction in progress 836,114
Other capital assets, net of accumulated depreciation 94,587,817
Less: related long-term debt outstanding (excluding unspent
capital related debt proceeds)
(823,727
)
Total Net Investment in Capital Assets $ 97,328,281
NOTE V – OTHER INFORMATION
A. EMPLOYEES’ RETIREMENT SYSTEM
Public Employees Retirement Association (PERA)
Plan description. The City participates in the following cost-sharing multiple-employer defined benefit
pension plans administered by the Public Employees Retirement Association of Minnesota (PERA).
PERA’s defined benefit pension plans are established and administered in accordance with Minnesota
Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax qualified plans under
Section 401 (a) of the Internal Revenue Code.
1. General Employees Retirement Plan
All full-time and certain part-time employees of the City are covered by the General Employees Plan.
General Employees Plan members belong to either the Coordinated Plan or the Basic Plan. Coordinated
Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was
closed to new members in 1967. All new members must participate in the Coordinated Plan.
2. Public Employees Police and Fire Plan
The Police and Fire Plan, originally established for police officers and firefighters not covered by a local
relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999,
the Police and Fire Plan also covers police officers and firefighters belonging to a local relief association
that elected to merge with and transfer assets and administration to PERA.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 47
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Benefits. PERA provides retirement, disability, and death benefits. Benefit provisions are established by
state statute and can only be modified by the state Legislature.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding
ratio of the plan. Members in plans that are at least 90 percent funded for two consecutive years are given
2.5 percent increases. Members in plans that have not exceeded 90 percent funded, or have fallen below
80 percent, are given one percent increases.
The benefit provisions stated in the following paragraphs of this section are current provisions and apply to
active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving
them yet are bound by the provisions in effect at the time they last terminated their public service.
1. General Employees Plan Benefits
General Employees Plan 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 metho ds are
used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member
receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2).
Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for
each of the first ten years of service and 2.7 percent for each remaining year. The annuity accrual rate for
a Coordinated Plan member is 1.2 percent of average salary for each of the first ten years and 1.7 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
members hired prior to July 1, 1989 a full annuity is available when age plus years of service equal 90 and
normal retirement age is 65. For members hired on or after July 1, 1989 normal retirement age is the age
for unreduced Social Security benefits capped at 66.
2. Police and Fire Plan Benefits
Benefits for Police and Fire Plan members first hired after June 30, 2010 but before July 1, 2014 vest on a
prorated basis from 50 percent after five years up to 100 percent after ten years of credited service.
Benefits for Police and Fire Plan members first hired after June 30, 2014 vest on a prorated basis from 50
percent after ten years up to 100 percent after twenty years of credited service. The annuity accrual rate is
3 percent of average salary for each year of service. For Police and Fire Plan members who were first
hired prior to July 1, 1989 a full annuity is available when age plus years of service equal at least 90.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 48
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Contributions. Minnesota Statutes Chapter 353 sets the rates for employer and employee
contributions. Contribution rates can only be modified by the state Legislature.
1. General Employees Plan Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.1 percent and 6.5
percent, respectively, of their annual covered salary in calendar year 2017. The City was required to
contribute 11.78 percent of pay for Basic Plan members and 7.50 percent for Coordinated Plan members
in calendar year 2017. The City’s contributions to the General Employees Plan for the year ended
December 31, 2017, were $331,224. The City’s contributions were equal to the required contributions as
set by state statute.
2. Police and Fire Plan Contributions
Plan members were required to contribute 10.8 percent of their annual covered salary in calendar year
2017. The City was required to contribute 16.2 percent of pay for members in calendar year 2017. The
City’s contributions to the Police and Fire Plan for the year ended December 31, 2017, were $356,264.
The City’s contributions were equal to the required contributions as set by state statute.
Pension Costs
1. General Employees Fund Pension Costs
At December 31, 2017, the City reported a liability of $4,155,941 for its proportionate share of the General
Employees Fund’s net pension liability. The City’s net pension liability reflected a reduction due to the
State of Minnesota’s contribution of $6 million to the fund in 2017. The State of Minnesota is considered a
non-employer contributing entity and the state’s contribution meets the definition of a special funding
situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City
totaled $52,248. The net pension liability was measured as of June 30, 2017 and the total pension liability
used to calculate the net pension liability was determined by an actuarial valuation as of that date. The
City’s proportion of the net pension liability was based on the City’s contributions received by PERA during
the measurement period for employer payroll paid dates from July 1, 2016 through June 30, 2017 relative
to the total employer contributions received from all of PERA’s participating employers. At June 30, 2017
the City’s proportion share was 0.0651 percent which was a decrease of 0.0002 percent from its
proportion measured as of 2016.
For the year ended December 31, 2017, the City recognized pension expense of $544,335 for its
proportionate share of the General Employees Plan’s pension expense. In addition, the City recognized an
additional $1,509 as pension expense and grant revenue for its proportionate share of the State of
Minnesota’s contribution of $6 million to the General Employees Fund.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 49
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Pension Costs (cont.)
1. General Employees Fund Pension Costs (cont.)
At December 31, 2017, the City reported its proportionate share of the General Employees Plan’s deferred
outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual economic experience $ 136,967 $ 266,839
Changes of actuarial assumptions 690,707 416,955
Difference between projected and actual investment earnings 24,885 -
Changes in proportion 20,730 102,606
Contributions paid to PERA subsequent to measurement date 169,856 -
Totals $ 1,043,145 $ 786,400
$169,856 reported as deferred outflows related to pension resulting from City contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2018. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pension will be recognized in pension expense as follows:
Year Ended
December 31:
Pension Expense
Amount
2018 $ 99,525
2019 246,126
2020 (83,084 )
2021 (175,678 )
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 50
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Pension Costs (cont.)
2. Police and Fire Fund Pension Costs
At December 31, 2017, the City reported a liability of $2,767,744 for its proportionate share of the Police
and Fire Fund’s net pension liability. The net pension liability was measured as of June 30, 2017, and the
total pension liability used to calculate the net pension liability was determined by an actuarial valuation as
of that date. The City’s proportion of the net pension liability was based on the City’s contributions received
by PERA during the measurement period for employer payroll paid dates from July 1, 2016, through June
30, 2017, relative to the total employer contributions received from all of PERA’s participating employers.
At June 30, 2017, the City’s proportion was 0.205 percent which was a decrease of 0.001 percent from its
proportion measured as of June 30, 2016.
For the year ended December 31, 2017, the City recognized pension expense of $687,127 for its
proportionate share of the Police and Fire Plan’s pension expense. The City also recognized $18,450 for
the year ended December 31, 2017, as pension expense and grant revenue for its proportionate share of
the State of Minnesota’s on-behalf contributions to the Police and Fire Fund. Legislation passed in 2013
required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year,
starting in fiscal year 2014.
At December 31, 2017, the City reported its proportionate share of the Police and Fire Plan’s deferred
outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Differences between expected and actual economic experience $ 63,708 $ 748,770
Changes in actuarial assumptions 3,643,230 3,929,510
Difference between projected and actual investment earnings 44,908 -
Changes in proportion 43,201 86,467
Contributions paid to PERA subsequent to measurement date 188,180 -
Totals $ 3,983,227 $ 4,764,747
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 51
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Pension Costs (cont.)
2. Police and Fire Fund Pension Costs (cont.)
$188,180 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the
year ended December 31, 2018. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
Year Ended
December 31:
Pension Expense
Amount
2018 $ 43,141
2019 43,141
2020 (40,682 )
2021 (235,451 )
2022 (779,849 )
Actuarial Assumptions
The total pension liability in the June 30, 2017, actuarial valuation was determined using the following
actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Salary increases were based on a service-related table. Mortality rates for active members, retirees,
survivors and disabilitants were based on RP 2014 tables for all plans for males or females, as
appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases for retirees
are assumed to be one percent per year for the General Employees Plan through 2044 and Police and
Fire Plan through 2064 and then 2.5 percent thereafter for both plans.
Actuarial assumptions used in the June 30, 2017, valuation were based on the results of actuarial
experience studies. The most recent four-year experience study in the General Employees Plan was
completed in 2015. The experience study for Police and Fire Plan was completed in 2016.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 52
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Actuarial Assumptions (cont.)
The following changes in actuarial assumptions occurred in 2017:
General Employees Fund
The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active
members and 60 percent for vested and non-vested deferred members. The revised CSA
loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred
member liability and 3.0 percent for non-vested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year
for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter.
Police and Fire Fund
Assumed salary increases were changed as recommended in the June 30, 2016 experience
study. The net effect is proposed rates that average 0.34 percent lower than the previous
rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested
deferred members. The CSA has been changed to 33 percent for vested members and 2
percent for non-vested members.
The base mortality table for healthy annuitants was changed from the RP-2000 fully
generational table to the RP-2014 fully generational table (with a base year of 2006), with
male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from
Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed
from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees.
Assumed termination rates were decreased to 3.0 percent for the first three years of service.
Rates beyond the select period of three years were adjusted, resulting in more expected
terminations overall.
Assumed percentage of married female members was decreased from 65 percent to 60
percent.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four
years older to the assumption that males are two years older than females.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 53
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Actuarial Assumptions (cont.)
Police and Fire Fund (cont.)
The assumed percentage of female members electing Joint and Survivor annuities was
increased.
The assumed post-retirement benefit increase rate was changed from 1.00 percent for all
years to 1.00 percent per year through 2064 and 2.50 percent thereafter.
The single discount rate changed from 5.60 percent to 7.50 percent.
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return using a building-block method
in which best-estimate ranges of expected future rates of return are developed for each major asset class.
These ranges are combined to produce an expected long-term rate of return by weighting the expected
future rates of return by the target asset allocation percentages. The target allocation and best estimates
of geometric real rates of return for each major asset class are summarized in the following table:
Asset Class
Long-Term Expected
Real Rate of Return Target Allocation
Domestic Stocks 5.10% 39%
International Stocks 5.30 19
Bonds 0.75 20
Alternative Assets 5.90 20
Cash 0.00 2
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 54
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Discount rate. The discount rate used to measure the total pension liability in 2017 was 7.50%. The
projection of cash flows used to determine the discount rate assumed that contributions from plan
members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions,
the fiduciary net positions of the General Employees Fund and the Police and Fire Fund was projected to
be available to make all projected future benefit payments of current plan members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
Pension Liability Sensitivity. The following presents the City’s proportionate share of the net pension
liability for all plans it participates in, calculated using the discount rate disclosed in the preceding
paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were
calculated using a discount rate one percentage point lower or one percentage point higher than the
current discount rate:
1% Decrease to
Discount Rate
Current Discount
Rate
1% Increase to
Discount Rate
City’s proportionate share of the
General Employees Fund net
pension liability $6,466,173 $4,155,941 $2,280,970
City’s proportionate share of the
Police and Fire Fund net pension
liability $5,212,469 $2,767,744 $749,488
Pension Plan Fiduciary Net Position. Detailed information about each pension plan’s fiduciary net
position is available in a separately-issued PERA financial report that includes financial statements and
required supplementary information. That report may be obtained on the Internet at www.mnpera.org.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 55
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Rosemount Fire Department Relief Association-Defined Benefit Pension Plan
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.
Benefits. Individuals with at least 20 years of service who have reached age 50 are entitled to a lump-sum
payment of $7,100 per year of service plus a Supplemental Benefit of 10% of the regular lump sum
distributions, but not more than $1,000. 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.
Employees covered by benefit terms. At December 31, 2016, the following employees were covered by
the benefit terms:
Inactive employees or beneficiaries currently receiving benefits -
Inactive employees entitled to but not yet receiving benefits 7
Active members 52
59
Contributions. 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 no covered payroll amounts or member contributions required.
Pension Costs. At December 31, 2017, the City reported a net pension asset of $1,246,634 for the plan.
The net pension asset was measured as of December 31, 2016. The total pension liability used to
calculate the net pension asset in accordance with GASB 68 was determined by applying an actuarial
formula to specific census data certified by the Department as of December 31, 2016.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 56
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Rosemount Fire Department Relief Association-Defined Benefit Pension Plan (cont.)
The following table presents the changes in net pension asset during the year.
Total
Pension
Liability
(a)
Plan
Fiduciary Net
Position
(b)
Net Pension
Liability
(Asset)
(a-b)
Beginning balance, January 1, 2017 $ 2,445,579 $ 3,447,069 $ (1,001,490 )
Changes for the year
Service cost 133,433 - 133,433
Interest on pension liability 148,293 - 148,293
Differences between expected and
actual experience
(76,515
)
-
(76,515
)
Changes of assumptions (68,607 ) - (68,607 )
Changes of benefit terms 52,512 - 52,512
Contributions (state and local) - 170,901 (170,901 )
Contributions - donations and other income - 277 (277 )
Net investment income - 271,652 (271,652 )
Benefit payments, including member
contribution refunds
-
(8,570
)
8,570
Total net changes 189,116 434,260 (245,144 )
Ending balance, December 31, 2017 $ 2,634,695 $ 3,881,329 $ (1,246,634 )
For the year ended December 31, 2017, the City recognized pension expense of $167,528.
At December 31, 2017, the City reported deferred inflows of resources and deferred outflows of
resources, its contributions subsequent to the measurement date, related to pension from the following
sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Difference between expected and actual experience $ - $ 70,324
Change in actuarial assumptions 25,540 63,056
Net differences between projected and actual
earnings on pension plan investments
88,820
-
Employer contributions subsequent to the
measurement date
30,000
-
Totals $ 144,360 $ 133,380
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 57
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Rosemount Fire Department Relief Association-Defined Benefit Pension Plan (cont.)
Deferred outflows of resources totaling $30,000 related to pensions resulting from the City's contributions
to the plan subsequent to the measurement date will be recognized as a reduction of the net pension
liability (asset) in the year ended December 31, 2018. Other amounts reported as deferred outflows of
resources and deferred inflows of resources related to pension will be recognized in pension expense as
follows:
Year Ended
December 31:
Future Recognition
2018 $ 25,578
2019 25,579
2020 26,627
2021 (22,632 )
2022 (8,417 )
Thereafter (65,755 )
Actuarial assumptions. The total pension liability at December 31, 2016 was determined using the entry
age normal actuarial cost method and the following actuarial assumptions:
Fifty (50) percent of active members will retire when reaching retirement eligibility (later of age 50 and 20
years of service); then fifty (50) percent retire each subsequent year until one hundred (100) percent
retirement at the earlier of age 65 or 30 years of service.
Actuarial Valuation Date: December 31, 2016
Measurement Date of Net Pension Asset: December 31, 2016
Actuarial Cost Method: Entry Age
Index rate for 20-year, tax exempt municipal bonds 3.78%
Long-Term Expected Rate of Return: 6.75%
Discount Rate: 6.75%
Inflation: 2.75%
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 58
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Rosemount Fire Department Relief Association-Defined Benefit Pension Plan (cont.)
Mortality rates were based on the July 1, 2016 Minnesota Public Employees’ Retirement Association
Police and Fire Plan actuarial valuation as described below:
Healthy Pre-Retirement – RP 2000 non-annuitant generational mortality, white collar adjustment,
male rates set back two years, female rates set back two years.
Healthy Post-Retirement – RP 2000 non-annuitant generational mortality, white collar adjustment,
without age adjustment.
The actuarial assumptions used in the December 31, 2016 valuation were based on the results of an
actuarial experience study for the period January 1, 2016–December 31, 2016.
The discount rate was updated from 5.75 % to 6.75%.
The benefit lump-sum payment per year of service increased from $7,000 to $7,100.
The long-term expected rate of return on pension plan investments was determined using a building-block
method in which best estimates for expected future real rates of return (expected returns, net of pension
plan investment expense and inflation) were developed for each major asset class. The asset class
estimates were combined to produce the portfolio long-term expected rate of return by weighting the
expected future real rates of return by the current asset allocation percentage and by adding expected
inflation (2.75%). All results are then rounded to the nearest quarter percentage point.
The best estimates of geometric real and nominal rates of return for each major asset class are
summarized in the following table:
Asset Class
Allocation at
Measurement Date
Long-Term
Expected Real
Rate of Return
Long-term
Expected Nominal
Rate of Return
Domestic equity 60.64% 5.58% 8.33%
International equity 1.94 5.71 8.46
Fixed income 13.59 2.27 5.02
Real estate and alternatives 0.51 4.44 7.19
Cash and cash equivalents 23.32 0.84 3.59
Total 100.00 % 7.09%
Reduced for assumed
investment expense
(0.41%)
Net assumed investment return
(weighted avg, rounded to ¼%)
6.75%
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 59
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Rosemount Fire Department Relief Association-Defined Benefit Pension Plan (cont.)
Discount rate. The discount rate used to measure the total pension liability was 6.75 percent. The
discount rate was developed using the alternative method. Considering the plan’s current overfunded
status, combined with statutory funding requirements, it is assumed the projected plan assets will be
adequate to pay future retiree benefits. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
Net pension asset sensitivity. The following presents the City’s net pension asset for the plan,
calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s net
pension asset would be if it were calculated using a discount rate 1 percent lower or 1 percent higher than
the current discount rate:
1 Percent
Decrease
Current
1 Percent
Increase
Net pension asset $ 1,176,319 $ 1,246,634 $ 1,314,602
Pension plan fiduciary net position. 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 145th Street West, Rosemount, Minnesota 55068-4997, or
by calling 651 423 4411.
B. RISK MANAGEMENT
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, 2017, 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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 60
NOTE V – OTHER INFORMATION (cont.)
C. COMMITMENTS AND CONTINGENCIES
Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting
Standards Board pronouncements are met. The liability and expenditure for claims and judgments are
only reported in governmental funds if it has matured. Claims and judgments are recorded in the
government-wide statements and proprietary funds as expenses when the related liabilities are incurred.
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 and the City
attorney 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.
The City has active construction projects as of December 31, 2017. Work that has been completed on
these projects but not yet paid for (including contract retainages) is reflected as accounts payable and
expenditures. $1,680,484 remains on commitments on signed contracts that were not year complete as of
year-end.
In 2007, the City, through the Port Authority TIF (Authority) which was established under Minnesota
Statutes Chapter 469.0813, entered into an agreement with 146th Street Partners, Limited Partnership
(Developer) in the form of a tax incremental revenue note to stimulate economic development. The
amount of the obligation is $1,500,000, and is payable to the developer solely from available tax
increments collected from a specific portion of the development. Payments are scheduled through the
year 2032, and carry an interest rate of 4.96%. The agreement is authorized through the Contract for
Private Redevelopment between the Authority and Developer. The Developer pays property taxes as they
become due, and since meeting the criteria established in the development agreement, is entitled to
incentive payments that directly correlate to the taxes paid. The incentive is based on the repayment
schedule in the tax incremental revenue note but only to the extent of available tax increment, defined as
90% of the tax increment that is received by the Authority in the six-month period immediate before each
payment date. The obligation does not constitute a charge upon any funds of the City. In the event that
future tax increments are not sufficient to pay off the obligation, the obligation terminates with no further
liability to the City. Since the amount of future payments is contingent on the collection of future TIF
increments, the obligation is not reported as a liability in the accompanying financial statements. Incentive
payments for the year ended December 31, 2017 were $144,735
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2017
Page 61
NOTE V – OTHER INFORMATION (cont.)
D. EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS
The Governmental Accounting Standards Board (GASB) has approved the following:
Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions
Statement No. 83, Certain Asset Retirement Obligations
Statement No. 84, Fiduciary Activities
Statement No, 85, Omnibus 2017
Statement No. 86, Certain Debt Extinguishment Issues
Statement No. 87, Leases
When they become effective, application of these standards may restate portions of these financial
statements.
R E Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N
Variance with
REVENUES Original Final Actual Final Budget
TAXES
General property tax 8,172,869$ 8,172,869$ 8,220,879$ 48,010$
Fiscal disparities 1,175,131 1,175,131 1,175,131 -
Other 356,000 356,000 354,627 (1,373)
Total Taxes 9,704,000 9,704,000 9,750,637 46,637
INTERGOVERNMENTAL REVENUES
State aid - police 172,500 172,500 186,837 14,337
State aid - general government 46,000 46,000 89,415 43,415
State aid - highway 41,300 41,300 42,495 1,195
Other 94,800 94,800 92,408 (2,392)
Total Intergovernmental Revenues 354,600 354,600 417,036 62,436
PUBLIC CHARGES FOR SERVICES
General government 1,028,900 1,028,900 991,270 (37,630)
Public safety 35,700 35,700 33,566 (2,134)
Highways and streets 55,700 55,700 96,112 40,412
Parks and recreation 214,100 214,100 244,892 30,792
SAC 3,500 3,500 3,926 426
Total Charges for Services 1,337,900 1,337,900 1,369,766 31,866
LICENSES AND PERMITS
Business 60,500 60,500 59,420 (1,080)
Non-business 635,400 635,400 681,823 46,423
Total Licenses and Permits 695,900 695,900 741,243 45,343
FINES AND FORFEITURES
County 120,000 120,000 101,327 (18,673)
SPECIAL ASSESSMENTS - - 345 345
INVESTMENT INCOME AND MISCELLANEOUS
Interest earnings 120,800 120,800 163,932 43,132
Change in fair value of investments - - (10,444) (10,444)
Miscellaneous general revenues 23,000 48,500 88,114 39,614
Donations - 11,399 11,399 -
Rents 33,000 33,000 36,590 3,590
Total Investment Income and Miscellaneous 176,800 213,699 289,591 75,892
Total Revenues 12,389,200 12,426,099 12,669,945 243,846
OTHER FINANCING SOURCES
Transfers in 3,500 3,500 3,721 221
TOTAL REVENUES AND OTHER
FINANCING SOURCES 12,392,700$ 12,429,599$ 12,673,666$ 244,067$
Budgeted Amounts
For the Year Ended December 31, 2017
CITY OF ROSEMOUNT
GENERAL FUND
SCHEDULE OF REVENUES AND OTHER SOURCES COMPARED TO BUDGET (BUDGETARY BASIS)
REQUIRED SUPPLEMENTARY INFORMATION
BUDGET AND ACTUAL
See auditors' report and accompanying notes to required supplementary information.
Page 62
Variance with
CURRENT EXPENDITURES Original Final Actual Final Budget
GENERAL GOVERNMENT
Mayor and council 279,000$ 304,500$ 212,319$ 92,181$
Executive 664,700 664,700 618,760 45,940
Elections 20,000 20,000 19,316 684
Finance 528,100 528,100 524,351 3,749
Community development 1,052,500 1,052,500 1,042,468 10,032
General government 323,600 323,600 352,351 (28,751)
TOTAL GENERAL GOVERNMENT 2,867,900 2,893,400 2,769,565 123,835
PUBLIC SAFETY
Police department 3,929,500 3,935,133 3,944,293 (9,160)
Fire department 384,800 384,800 363,515 21,285
TOTAL PUBLIC SAFETY 4,314,300 4,319,933 4,307,808 12,125
PUBLIC WORKS
Government building maintenance 575,800 575,800 521,262 54,538
Fleet maintenance 652,000 652,000 539,762 112,238
Street maintenance 1,423,500 1,423,500 1,425,701 (2,201)
Park maintenance 940,000 940,000 870,178 69,822
TOTAL PUBLIC WORKS 3,591,300 3,591,300 3,356,903 234,397
PARKS AND RECREATION 1,489,200 1,494,966 1,546,723 (51,757)
CAPITAL OUTLAY - - 68,105 (68,105)
OTHER FINANCING USES
Transfers out 130,000 130,000 147,914 (17,914)
TOTAL EXPENDITURES AND
OTHER FINANCING USES 12,392,700$ 12,429,599$ 12,197,018 232,581$
Beginning of year budget basis encumbrances 1,997,456
End of year budget basis encumbrances (1,188,524)
GAAP basis expenditures and other financing uses 13,005,950$
Budgeted Amounts
For the Year Ended December 31, 2017
CITY OF ROSEMOUNT
GENERAL FUND
SCHEDULE OF EXPENDITURES AND OTHER USES (BUDGETARY BASIS) - BUDGET AND ACTUAL
REQUIRED SUPPLEMENTARY INFORMATION
See auditors' report and accompanying notes to required supplementary information.
Page 63
State's City's and State's
City's City's Proportionate Proportionate City's Proportionate Plan Fiduciary
Proportion Proportionate Share of the Net Share of the Net Share of the Net Net Position
City Fiscal PERA Fiscal of the Net Share of the Pension Liability Pension Liability City's Pension Liability as a as a Percentage
Year End Year End Date Pension Net Pension Associated Associated Covered Percentage of Covered of the total
Date (Measurement Date)Liability Liability (a)with City (b)with City (a+b)Payroll ** (c)Payroll ((a+b)/c)Pension Liability
12/31/15 6/30/15 0.0645%3,342,725$ n/a 3,342,725$ 3,896,543$ 85.79%78.20%
12/31/16 6/30/16 0.0653%5,302,014 69,191 5,371,205 4,004,601 134.13%68.90%
12/31/17 6/30/17 0.0651%4,155,941 52,248 4,208,189 4,192,648 100.37%75.90%
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2015.
**For purposes of this schedule, covered payroll is defined as "pensionable wages."
Contributions in
Relation to the Contributions
City Fiscal PERA Fiscal Statutorily Statutorily Contribution as a Percentage
Year End Year End Date Required Required Deficiency Covered of Covered
Date (Measurement Date)Contributions (a)Contributions (b)(Excess) (a-b)Payroll ** (d)Payroll (b/d)
12/31/15 6/30/15 292,241$ 292,241$ -$ 3,896,543$ 7.50%
12/31/16 6/30/16 308,184 308,184 - 4,109,750 7.50%
12/31/17 6/30/17 331,224 331,224 - 4,417,884 7.50%
* This schedule is presented prospectively beginning with the fiscal year ended December 31, 2015.
**For purposes of this schedule, covered payroll is defined as "pensionable wages."
CITY OF ROSEMOUNT
SCHEDULE OF CITY'S AND NONEMPLOYER PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -
PUBLIC EMPLOYEES GENERAL EMPLOYEES RETIREMENT FUND
For the Year Ended December 31, 2017
For the Year Ended December 31, 2017
PUBLIC EMPLOYEES GENERAL EMPLOYEES RETIREMENT FUND
SCHEDULE OF EMPLOYER CONTRIBUTIONS -
REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
See auditors' report and accompanying notes to required supplementary information.
Page 64
City's City's City's Proportionate Plan Fiduciary
Proportion Proportionate Share of the Net Position
City Fiscal PERA Fiscal of the Net Share of the City's Net Pension Liability as a Percentage
Year End Year End Date Pension Net Pension **Covered as a Percentage of of the total
Date (Measurement Date)Liability Liability (a)Payroll (b)Covered Payroll (a/b)Pension Liability
12/31/15 6/30/15 0.2130%2,420,178$ 1,984,803$ 121.94%86.60%
12/31/16 6/30/16 0.2060%8,267,138 1,895,019 436.26%63.90%
12/31/17 6/30/17 0.2050%2,767,744 2,107,072 131.35%85.40%
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2015.
**For purposes of this schedule, covered payroll is defined as "pensionable wages."
Contributions in
Relation to the Contributions
City Fiscal PERA Fiscal Statutorily Statutorily Contribution as a Percentage
Year End Year End Date Required Required Deficiency Covered of Covered
Date (Measurement Date)Contributions (a)Contributions (b)(Excess) (a-b)Payroll ** (d)Payroll (b/d)
12/31/15 6/30/15 321,538$ 321,538$ -$ 1,984,803$ 16.20%
12/31/16 6/30/16 326,037 326,037 - 2,012,572 16.20%
12/31/17 6/30/17 356,264 356,264 - 2,199,164 16.20%
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2015.
**For purposes of this schedule, covered payroll is defined as "pensionable wages."
For the Year Ended December 31, 2017
PUBLIC EMPLOYEES POLICE AND FIRE FUND
REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
CITY OF ROSEMOUNT
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY -
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For the Year Ended December 31, 2017
SCHEDULE OF EMPLOYER CONTRIBUTIONS -
See auditors' report and accompanying notes to required supplementary information.Page 65
City's year end 2015 City's year end 2016 City's year end 2017
Measurement date 2014 Measurement date 2015 Measurement date 2016
Total Pension Liability
Service cost 113,354$ 116,471$ 133,433$
Interest 125,956 137,850 148,293
Changes of assumptions - 32,190 (68,607)
Differences between expected and
actual experience - - (76,515)
Changes of benefit terms - 22,230 52,512
Benefit payments, including member
contribution refunds - (88,394) -
Net change in total pension liability 239,310 220,347 189,116
Total pension liability - beginning 1,985,922 2,225,232 2,445,579
Total pension liability - ending 2,225,232$ 2,445,579$ 2,634,695$
Plan Fiduciary Net Position
Contributions - State and local 296,595$ 244,269$ 170,901$
Contributions - donations and other - - 277
Net investment income 186,351 (44,297) 271,652
Benefit payments, including member
contribution refunds - (88,394) -
Administrative costs (8,300) (13,285) (8,570)
Net change in plan fiduciary net position 474,646 98,293 434,260
Plan fiduciary net position - beginning 2,874,130 3,348,776 3,447,069
Plan fiduciary net position - ending 3,348,776$ 3,447,069$ 3,881,329$
Net pension liability/(asset) - ending (1,123,544)$ (1,001,490)$ (1,246,634)$
Plan fiduciary net position as a
percentage of the total pension liability 150.49%140.95%147.32%
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2015.
CITY OF ROSEMOUNT
SCHEDULE OF CHANGES IN THE ROSEMOUNT FIRE DEPARTMENT RELIEF ASSOCIATION'S
NET PENSION ASSET AND RELATED RATIOS REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
For the Year Ended December 31, 2017
See auditors' report and accompanying notes to required supplementary information.
Page 66
Non-Employer
Statutorily Contribution
Year End Determined Actual Contribution State 2%
Date Contribution Contribution Excess Fire Aid
12/31/15 -$ 109,100$ 109,100$ 135,169$
12/31/16 - 30,000 30,000 140,901
12/31/17 - 30,000 30,000 140,267
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2015.
City Contributions
ROSEMOUNT FIRE DEPARTMENT RELIEF ASSOCIATION
REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
For the Year Ended December 31, 2017
CITY OF ROSEMOUNT
SCHEDULE OF EMPLOYER CONTRIBUTIONS -
See auditors' report and accompanying notes to required supplementary information.
Page 67
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2017
See auditors’ report.
Page 68
Budgetary Information
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.
Public Employees Retirement Association (PERA)
The amounts determined for each fiscal year were determined as of the calendar year-end and occurred
within the fiscal year.
The City is required to present the last ten years of data; however, accounting standards allow the
presentation of as many years as are available until ten fiscal years are presented.
Changes in benefit terms: There were no changes of benefit terms for any participating employer in the
Public Employees Retirement Association.
2017 General Employees Fund Changes:
Changes in Actuarial Assumptions:
The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members
and 60 percent for vested and nonvested deferred members. The revised CSA loads are now
zero percent for active member liability, 15.0 percent for vested deferred member liability, and 3.0
percent for nonvested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all
years to 1.0 percent per year through 2044, and 2.5 percent per year thereafter.
2016 General Employees Fund Changes:
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year
through 2035, and 2.5 percent per year thereafter, to 1.0 percent per year for all years.
The assumed investment return was changed from 7.9 percent to 7.5 percent. The single
discount rate was changed from 7.9 percent to 7.5 percent.
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to
3.25 percent for payroll growth, and 2.50 percent for inflation.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2017
See auditors’ report.
Page 69
Public Employees Retirement Association (PERA) (cont.)
2015 General Employees Fund Changes:
Changes in Plan Provisions:
On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General
Employees Retirement Fund, which increased the total pension liability by $1.1 billion and
increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer
contributions were revised.
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year
through 2030, and 2.5 percent per year thereafter, to 1.0 percent per year through 2035, and 2.5
percent per year thereafter.
2017 Police and Fire Fund Changes:
Changes in Actuarial Assumptions:
Assumed salary increases were changed as recommended in the June 30, 2016 experience
study. The net effect is proposed rates that average 0.34 percent lower than the previous rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30 percent for vested and nonvested deferred
members. The CSA has been changed to 33 percent for vested members and 2 percent for
nonvested members.
The base mortality table for healthy annuitants was changed from the RP-2000 fully generational
table to the RP-2014 Fully Generational Table (with a base year of 2006), with male rates
adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to
Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-2000
Disabled Mortality Table to the mortality tables assumed for healthy retirees.
Assumed termination rates were decreased to 3.0 percent for the first three years of service.
Rates beyond the select period of three years were adjusted, resulting in more expected
terminations overall.
Assumed percentage of married female members was decreased from 65 percent to 60 percent.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
The assumed percentage of female members electing joint and survivor annuities was increased.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2017
See auditors’ report.
Page 70
Public Employees Retirement Association (PERA) (cont.)
2017 Police and Fire Fund Changes (cont.):
Changes in Actuarial Assumptions (cont.):
The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to
1.00 percent per year through 2064, and 2.50 percent thereafter.
The single discount rate changed from 5.60 percent to 7.50 percent.
2016 Police and Fire Fund Changes:
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year
through 2037, and 2.5 percent thereafter, to 1.0 percent per year for all future years.
The assumed investment return was changed from 7.9 percent to 7.5 percent. The single
discount rate changed from 7.9 percent to 5.6 percent.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25
percent to 3.25 percent for payroll growth, and 2.50 percent for inflation.
2015 Police and Fire Fund Changes:
Changes in Plan Provisions:
The post-retirement benefit increase to be paid after attainment of the 90 percent funding
threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year
through 2030, and 2.5 percent per year thereafter, to 1.0 percent per year through 2037, and 2.5
percent per year thereafter.
S U P P L E M E N T A R Y I N F O R M A T I O N
Total
Fire Nonmajor
Safety Port Authority Governmental
PEG Fees Education GIS General Funds
ASSETS
Cash and investments 16,599$ 3,030$ 42,732$ 184,702$ 247,063$
Receivables from:
Accounts 5,160 - - - 5,160
Prepaid items - - - 444 444
TOTAL ASSETS 21,759$ 3,030$ 42,732$ 185,146$ 252,667$
LIABILITIES
Accounts payable -$ -$ -$ 302$ 302$
FUND BALANCES
Nonspendable - - - 444 444
Restricted 21,759 - - - 21,759
Committed - 3,030 42,732 184,400 230,162
Total Fund Balances 21,759 3,030 42,732 184,844 252,365
TOTAL LIABILITIES AND
FUND BALANCES 21,759$ 3,030$ 42,732$ 185,146$ 252,667$
CITY OF ROSEMOUNT
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
As of December 31, 2017
Special Revenue Funds
Page 71
Total
Fire Nonmajor
Safety Port Authority Governmental
PEG Fees Education GIS General Funds
REVENUES
Taxes 21,744$ -$ -$ 58,000$ 79,744$
Intergovernmental - - - 32,479 32,479
Public charges for services - - 11,863 3,710 15,573
Miscellaneous 15 625 70 232 942
Total Revenues 21,759 625 11,933 94,421 128,738
EXPENDITURES
Current
General government - - - 51,920 51,920
Capital Outlay - - - 5,842 5,842
Total Expenditures - - - 57,762 57,762
Net change in fund balance 21,759 625 11,933 36,659 70,976
FUND BALANCES - Beginning of Year - 2,405 30,799 148,185 181,389
FUND BALANCES - END OF YEAR 21,759$ 3,030$ 42,732$ 184,844$ 252,365$
For the Year Ended December 31, 2017
Special Revenue Funds
CITY OF ROSEMOUNT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS
Page 72
Original and
Final Budgeted Variance with
Amounts Actual Final Budget
REVENUES
Taxes 24,000$ 24,000$ -$
Public charges for services 1,050,000 1,414,337 364,337
Interest earnings 16,000 35,570 19,570
Total Revenues 1,090,000 1,473,907 383,907
EXPENDITURES
Current
General government 4,700 4,731 (31)
Capital Outlay 2,668,800 2,027,201 641,599
Total Expenditures 2,673,500 2,031,932 641,568
Net Change in Fund Balance (1,583,500) (558,025) 1,025,475
FUND BALANCE - Beginning 671,146 671,146 -
FUND BALANCE - ENDING (912,354)$ 113,121$ 1,025,475$
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
CITY OF ROSEMOUNT
For the Year Ended December 31, 2017
IN FUND BALANCE (BUDGETARY BASIS) - BUDGET AND ACTUAL
BUILDING CIP CAPITAL PROJECT SUB-FUND
Page 73
Original and
Final Budgeted Variance with
Amounts Actual Final Budget
REVENUES
Taxes 811,400$ 811,400$ -$
Public charges for services 125,000 125,000 -
Special assessments - 501,906 501,906
Interest earnings 2,500 44,173 41,673
Total Revenues 938,900 1,482,479 543,579
EXPENDITURES
Current
General government 2,500 3,454 (954)
Public works - 23 (23)
Capital Outlay 2,541,400 207,331 2,334,069
Total Expenditures 2,543,900 210,808 2,333,092
Excess (deficiency) of revenues over expenditures (1,605,000) 1,271,671 2,876,671
OTHER FINANCING SOURCES (USES)
Transfers in - 55,882 55,882
Transfers out - (1,625,961) (1,625,961)
Total Other Financing Sources (Uses) - (1,570,079) (1,570,079)
Net Change in Fund Balance (1,605,000) (298,408) 1,306,592
FUND BALANCE - Beginning 3,782,367 3,782,367 -
FUND BALANCE - ENDING 2,177,367$ 3,483,959$ 1,306,592$
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
CITY OF ROSEMOUNT
For the Year Ended December 31, 2017
IN FUND BALANCE (BUDGETARY BASIS) - BUDGET AND ACTUAL
STREET CIP CAPITAL PROJECT SUB-FUND
Page 74
Original and
Final Budgeted Variance with
Amounts Actual Final Budget
REVENUES
Taxes 580,000$ 580,000$ -$
Interest earnings 10,500 12,888 2,388
Miscellaneous - 855 855
Total Revenues 590,500 593,743 3,243
EXPENDITURES
Current
General government 2,500 2,500 -
Capital Outlay 931,600 882,040 49,560
Total Expenditures 934,100 884,540 49,560
Excess (deficiency) of revenues over expenditures (343,600) (290,797) 52,803
OTHER FINANCING SOURCES
Sale of capital assets 18,000 42,394 24,394
Net Change in Fund Balance (325,600) (248,403) 77,197
FUND BALANCE - Beginning 1,063,510 1,063,510 -
FUND BALANCE - ENDING 737,910$ 815,107$ 77,197$
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
CITY OF ROSEMOUNT
For the Year Ended December 31, 2017
IN FUND BALANCE (BUDGETARY BASIS) - BUDGET AND ACTUAL
EQUIPMENT CIP CAPITAL PROJECT SUB-FUND
Page 75
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 76
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 81
These schedules contain information to help the reader assess the government’s
most significant local revenue source, the property tax.
Debt Capacity 85
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 90
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 92
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.
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial repor ts
for the relevant year.
Schedule 1
City of Rosemount
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Governmental activities
Net investment in capital assets 37,876,848$ 41,347,888$ 49,563,765$ 53,419,036$ 54,828,890$ 57,746,938$ 58,438,402$ 64,684,403$ 69,942,544$ 74,294,033$
Restricted (1)6,621,026 4,637,711 5,361,675 5,764,792 6,608,554 7,148,774 - - - -
Restricted for debt service - - - - - - 7,709,903 6,925,597 6,111,575 5,883,329
Restricted donations for future construction - - - - - - 1,988,610 1,589,000 - -
Restricted for pension - - - - - - - 1,123,544 1,001,490 1,246,634
Restricted for PEG fees - - - - - - - - - 21,759
Unrestricted 14,114,135 14,979,767 14,089,305 16,772,383 15,970,416 15,883,105 17,913,535 13,031,913 13,100,682 14,090,028
Total governmental activities net position 58,612,009 60,965,366 69,014,745 75,956,211 77,407,860 80,778,817 86,050,450 87,354,457 90,156,291 95,535,783
Business-type activities
Net investment in capital assets 89,687,681$ 91,948,323$ 89,025,234$ 90,695,202$ 93,501,405$ 95,770,585$ 98,194,408$ 96,808,557$ 98,722,624$ 97,328,281$
Unrestricted 20,158,226 18,517,148 20,059,049 17,772,742 19,247,600 18,591,663 19,348,437 20,376,753 21,739,120 23,521,090
Total business-type activities net position 109,845,907 110,465,471 109,084,283 108,467,944 112,749,005 114,362,248 117,542,845 117,185,310 120,461,744 120,849,371
Primary government
Net investment in capital assets 127,564,529$ 133,296,211$ 138,588,999$ 144,114,238$ 148,330,295$ 153,517,523$ 156,632,810$ 161,492,960$ 168,665,168$ 171,622,314$
Restricted (1)6,621,026 4,637,711 5,361,675 5,764,792 6,608,554 7,148,774 - - - -
Restricted for debt service - - - - - - 7,709,903 6,925,597 6,111,575 5,883,329
Restricted donations for future construction - - - - - - 1,988,610 1,589,000 - -
Restricted for pension - - - - - - - 1,123,544 1,001,490 1,246,634
Restricted for PEG fees - - - - - - - - - 21,759
Unrestricted 34,272,361 33,496,915 34,148,354 34,545,125 35,218,016 34,474,768 37,261,972 33,408,666 34,839,802 37,611,118
Total primary government net position 168,457,916$ 171,430,837$ 178,099,028$ 184,424,155$ 190,156,865$ 195,141,065$ 203,593,295$ 204,539,767$ 210,618,035$ 216,385,154$
(1) Prior to 2014 "Restricted" was included in one summary line.
Source: City of Rosemount Comprehensive Annual Financial Reports
Fiscal Years
Page 76
Schedule 2
City of Rosemount
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Expenses
Governmental activities
General government 2,639,752$ 2,754,573$ 2,671,886$ 2,612,911$ 2,701,234$ 2,583,271$ 2,961,500$ 2,878,070$ 4,426,817$ 3,859,090$
Public safety 3,468,249 3,688,658 3,819,520 3,763,742 3,872,633 4,051,642 4,233,610 4,378,347 5,629,866 5,170,637
Public works 5,279,784 4,260,284 4,326,903 4,336,345 4,341,203 5,448,047 5,764,176 4,468,049 4,765,115 5,822,738
Culture, education and recreation 1,417,400 1,378,619 1,477,525 1,496,068 2,405,676 1,586,449 1,613,600 1,643,886 1,959,224 2,042,299
Conservation and economic development 1,956,865 648,476 149,701 9,069 - 3,267 1,032,304 53,040 3,968 4,315
Interest and fiscal charges 958,900 750,226 690,896 637,609 541,386 517,067 501,682 569,722 476,121 308,567
Total governmental activities expenses 15,720,950 13,480,836 13,136,431 12,855,744 13,862,132 14,189,743 16,106,872 13,991,114 17,261,111 17,207,646
Business-Type activities
Water Utility 1,893,099 1,878,310 1,861,467 1,792,613 1,827,543 1,903,275 1,962,833 2,219,781 2,075,460 2,175,626
Sewer Utility 2,123,397 2,313,576 2,305,503 2,386,660 2,317,324 2,425,486 2,522,913 2,575,330 2,742,402 2,837,550
Storm Water Utility 988,716 989,808 1,010,678 950,114 968,935 989,574 1,122,839 1,117,526 1,228,697 1,275,073
Arena 537,530 456,706 484,278 479,707 498,118 578,345 493,943 497,838 510,968 484,903
Total Business-Type activities expenses 5,542,742 5,638,400 5,661,926 5,609,094 5,611,920 5,896,680 6,102,528 6,410,475 6,557,527 6,773,152
Total primary government expenses 21,263,692$ 19,119,236$ 18,798,357$ 18,464,838$ 19,474,052$ 20,086,423$ 22,209,400$ 20,401,589$ 23,818,638$ 23,980,798$
Program Revenues
Governmental activities
Charges for services
General government 2,031,866$ 1,501,756$ 1,672,014$ 1,881,337$ 2,286,892$ 2,465,695$ 3,202,744$ 3,182,769$ 3,128,969$ 3,286,273$
Public safety 203,056 169,112 151,802 169,718 184,011 139,432 146,973 151,168 150,571 134,893
Public works 32,160 15,050 20,912 68,166 45,564 53,813 59,417 99,060 54,893 100,038
Culture, education and recreation 403,560 244,374 263,238 272,958 365,486 342,100 571,222 728,567 392,102 779,541
Operating grants and contributions
General government 22,580 - - - 46,326 - - - 20,631 1,509
Public safety 233,349 254,175 246,346 249,515 275,114 263,805 283,095 406,657 547,505 366,654
Public works 392,136 380,737 311,630 108,640 53,198 32,790 53,515 41,235 41,235 42,495
Culture, education and recreation 628 659 26,484 33,499 1,275 6,241 3,736 7,347 2,617 1,337
Conservation and economic development 82,803 60,100 20,100 67,400 - 20,635 22,536 23,000 24,000 25,000
Capital grants and contributions
General government 1,775 7,118 - - - - 1,988,610 - - -
Public safety 337 3,971 697 - - - 18,131 - 3,918 6,358
Public works 3,762,115 1,206,361 5,320,892 4,214,641 3,628,190 3,967,849 4,318,692 1,650,864 3,170,374 3,538,480
Culture, education and recreation 531 4,203 9,218 - - - - - 419 293
Conservation and economic development 522,179 256,357 19,425 - 39,352 322,808 740,660 287,090 7,000 33,629
Total governmental activities program revenues 7,689,075 4,103,973 8,062,758 7,065,874 6,925,408 7,615,168 11,409,331 6,577,757 7,544,234 8,316,500
Fiscal Years
Page 77
Schedule 2 (continued)
City of Rosemount
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Business-Type activities
Charges for services
Water Utility 2,027,618 1,764,784 1,952,359 1,983,264 2,406,557 2,167,709 2,379,147 2,552,123 2,692,740 3,041,642
Sewer Utility 1,767,732 1,482,651 1,470,801 1,470,626 1,707,730 1,716,022 1,733,646 1,873,687 1,996,130 2,126,771
Storm Water Utility 1,137,287 852,704 888,995 927,429 1,135,067 1,061,632 1,350,259 1,544,158 1,387,817 1,693,845
Arena 390,631 370,964 406,797 378,046 352,930 376,058 392,631 408,874 430,103 441,059
Operating grants and contributions
Water Utility - - - - - - 9,901 - 24,248 84,042
Storm Water Utility - - - - - - 19,680 - - -
Capital grants and contributions
Water Utility 56,388 70,279 72,960 243,835 168,573 371,582 180,568 75,622 1,041,806 216,454
Sewer Utility 392,757 416,493 71,656 110,538 207,422 83,484 98,863 85,848 1,153,536 204,114
Storm Water Utility 18,165 1,075,041 85,242 190,022 487,082 648,297 193,402 42,708 989,073 210,802
Total Business-Type activities program revenues 5,790,578 6,032,916 4,948,810 5,303,760 6,465,361 6,424,784 6,358,097 6,583,020 9,715,453 8,018,729
Total primary government program revenues 13,479,653 10,136,889 13,011,568 12,369,634 13,390,769 14,039,952 17,767,428 13,160,777 17,259,687 16,335,229
Net (Expense) Revenue
Governmental activities (8,031,875) (9,376,863) (5,073,673) (5,789,870) (6,936,724) (6,574,575) (4,697,541) (7,413,357) (9,716,877) (8,891,146)
Business-Type activities 247,836 394,516 (713,116) (305,334) 853,441 528,104 255,569 172,545 3,157,926 1,245,577
Total primary government net expense (7,784,039)$ (8,982,347)$ (5,786,789)$ (6,095,204)$ (6,083,283)$ (6,046,471)$ (4,441,972)$ (7,240,812)$ (6,558,951)$ (7,645,569)$
General Revenues and Other Changes in Net Position
Governmental activities
Property taxes, levied for general purposes 9,437,336$ 9,768,391$ 10,023,255$ 10,266,170$ 10,001,071$ 10,123,158$ 10,328,709$ 10,479,883$ 10,709,952$ 11,139,036$
Property taxes, levied for debt service 2,005,338 1,711,452 1,257,365 936,054 1,038,404 1,037,524 1,022,258 1,094,210 1,142,142 1,178,589
Other taxes 208,667 224,276 264,808 262,783 242,491 259,064 288,425 332,290 354,571 366,745
Investment income 611,533 297,536 164,474 243,193 136,310 121,886 221,243 181,754 270,676 307,497
Change in fair value of investments n/a n/a n/a n/a n/a (458,073) 319,644 (1,788) (147,945) (20,104)
Gain (loss) on the sale of assets (2,125,256) (851,439) - 130,114 13,248 12,883 - 7,328 - -
Miscellaneous 365,516 340,763 429,150 204,149 127,617 116,123 103,615 104,237 103,394 171,294
Transfers (1,339,200) 239,241 984,000 688,873 (3,170,768) (1,267,033) (2,314,720) (31,534) 85,921 1,127,581
Total governmental activities 9,163,934 11,730,220 13,123,052 12,731,336 8,388,373 9,945,532 9,969,174 12,166,380 12,518,711 14,270,638
Business-Type activities
Investment income 726,105 464,289 315,928 377,868 256,852 209,227 333,929 272,336 339,012 295,867
Change in fair value of investments n/a n/a n/a n/a n/a (391,121) 276,379 (24,638) (134,583) (26,236)
Transfers 1,339,200 (239,241) (984,000) (688,873) 3,170,768 1,267,033 2,314,720 31,534 (85,921) (1,127,581)
Total Business-Type activities 2,065,305 225,048 (668,072) (311,005) 3,427,620 1,085,139 2,925,028 279,232 118,508 (857,950)
Total primary government 11,229,239 11,955,268 12,454,980 12,420,331 11,815,993 11,030,671 12,894,202 12,445,612 12,637,219 13,412,688
Change in Net Position
Governmental activities 1,132,059 2,353,357 8,049,379 6,941,466 1,451,649 3,370,957 5,271,633 4,753,023 2,801,834 5,379,492
Business-Type activities 2,313,141 619,564 (1,381,188) (616,339) 4,281,061 1,613,243 3,180,597 451,777 3,276,434 387,627
Total primary government 3,445,200$ 2,972,921$ 6,668,191$ 6,325,127$ 5,732,710$ 4,984,200$ 8,452,230$ 5,204,800$ 6,078,268$ 5,767,119$
Source: City of Rosemount Comprehensive Annual Financial Reports
n/a - Not Available
Fiscal Years
Page 78
Schedule 3
City of Rosemount
Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General Fund
Reserved for
Prepaid items 34,120$ 78,379$ 33,280$ -$ -$ -$ -$ -$ -$ -$
Encumbrances 524,904 638,254 465,544 - - - - - - -
Unreserved
Designated 6,480,777 6,536,929 6,653,352 - - - - - - -
Undesignated 10,059 15,549 32,941 - - - - - - -
Nonspendable - - - 85,067 80,623 67,266 66,238 69,348 - -
Assigned - - - 1,894,348 2,319,433 2,292,257 2,808,794 2,981,632 2,969,701 2,222,507
Unassigned - - - 5,700,071 5,905,056 6,001,628 6,288,615 6,506,697 6,918,833 7,333,743
Total General Fund 7,049,860 7,269,111 7,185,117 7,679,486 8,305,112 8,361,151 9,163,647 9,557,677 9,888,534 9,556,250
All Other Governmental Funds
Reserved for
Debt service 5,582,205 3,854,760 6,173,964 - - - - - - -
Special revenue funds - prepaid items - - - - - - - - - -
Capital projects funds - encumbrances 331,014 1,118,650 1,061,526 - - - - - - -
Unreserved
Designated
Capital projects funds 5,297,333 4,984,835 3,510,512 - - - - - - -
Special revenue funds 15,017 9,374 6,900 - - - - - - -
Undesignated
Port Authority TIF fund 182,826 262,577 429,284 - - - - - - -
Special revenue funds 109,523 125,132 134,919
Nonspendable for
Capital projects funds - - - - 10,000 10,000 10,000 10,000 10,000 -
Nonmajor governmental funds - - - - - - 549 606 113 444
Restricted for
Debt service - - - 4,782,476 4,193,284 4,554,980 4,976,137 5,256,841 4,307,191 2,983,348
Capital Projects - - - - - - 1,988,610 1,589,000 - -
Port Authority TIF fund - - - 677,057 887,616 1,046,218 1,021,730 4,534,417 4,994,060 1,849,055
Nonmajor governmental funds - - - - - - - - - 21,759
Committed for
Nonmajor governmental funds - - - 159,048 191,307 214,031 290,834 190,941 181,276 230,162
Assigned for
Capital projects funds - - - 8,515,086 6,229,951 6,243,406 7,330,501 6,923,755 8,397,771 10,804,425
Total All Other Governmental Funds 11,517,918 10,355,328 11,317,105 14,133,667 11,512,158 12,068,635 15,618,361 18,505,560 17,890,411 15,889,193
Total All Funds 18,567,778$ 17,624,439$ 18,502,222$ 21,813,153$ 19,817,270$ 20,429,786$ 24,782,008$ 28,063,237$ 27,778,945$ 25,445,443$
Source: City of Rosemount Comprehensive Annual Financial Reports
Note: Beginning in 2011, the categories of fund balance changed with the implementation of GASB statement No. 54
Fiscal Years
Page 79
Schedule 4
City of Rosemount
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Revenues
Taxes 11,079,607$ 11,049,769$ 10,822,174$ 10,643,333$ 10,376,939$ 10,514,617$ 10,747,756$ 10,940,420$ 11,167,397$ 11,591,837$
Tax increments 296,735 379,351 448,253 576,675 660,056 660,130 646,636 720,963 794,268 832,533
Intergovernmental 1,511,195 947,554 4,051,643 2,394,400 584,381 2,288,281 2,509,924 882,930 674,220 1,216,200
Public charges for services 1,844,648 1,382,597 1,540,191 2,226,976 2,277,051 2,370,562 3,132,556 3,352,219 2,826,231 3,457,253
Licenses and permits 698,756 430,551 453,900 388,615 484,644 522,131 730,765 694,765 792,557 741,243
Fines and forfeitures 129,220 124,068 122,394 124,324 129,343 106,617 116,384 114,580 108,561 101,327
Special assessments 962,950 757,223 832,686 496,386 2,155,618 1,539,059 2,123,199 2,368,403 1,035,044 718,051
Investment income and miscellaneous 3,538,350 1,268,846 1,224,178 1,552,188 1,773,249 650,402 3,135,395 1,240,234 508,130 1,546,665
Total revenues 20,061,461 16,339,959 19,495,419 18,402,897 18,441,281 18,651,799 23,142,615 20,314,514 17,906,408 20,205,109
Expenditures
General government 2,579,263 2,522,244 2,368,489 2,382,663 2,569,649 2,506,529 2,752,153 2,841,775 2,977,518 3,253,808
Public safety 3,096,468 3,297,520 3,366,500 3,436,225 3,510,222 3,632,212 3,762,826 4,014,411 4,072,189 4,306,808
Public works 3,105,778 2,687,294 2,805,767 3,078,059 3,032,940 3,285,257 3,192,487 2,957,952 3,005,419 4,141,175
Parks and recreation 1,186,883 1,153,777 1,239,742 1,239,857 1,271,513 1,321,946 1,304,867 1,298,271 1,516,720 1,546,723
Conservation and development 1,944,457 160,445 139,965 - - - 376,496 - - -
Capital Outlay 6,689,680 3,835,826 7,808,264 6,185,959 8,096,866 7,628,944 9,470,432 6,831,658 5,087,107 5,676,815
Debt Service
Principal retirement 4,300,000 3,645,000 1,840,000 2,225,000 2,405,000 1,545,000 1,580,000 3,470,000 2,165,000 2,240,000
Interest and fiscal charges 843,205 826,350 726,878 677,469 582,377 511,526 508,605 573,607 495,638 384,544
Total expenditures 23,745,734 18,128,456 20,295,605 19,225,232 21,468,567 20,431,414 22,947,866 21,987,674 19,319,591 21,549,873
Excess (deficiency) of revenues
over (under) expenditures (3,684,273) (1,788,497) (800,186) (822,335) (3,027,286) (1,779,615) 194,749 (1,673,160) (1,413,183) (1,344,764)
Other financing sources (uses)
Issuance of long-term debt 6,425,000 - 1,355,000 2,080,000 810,000 1,500,000 2,400,000 4,680,000 - 1,055,000
Payment to escrow agent - - - - - - - - - (3,275,000)
Premium on long-term debt - - - - - - - 180,637 - 61,287
Sale of capital assets 4,780 3,000 12,505 10,121 12,740 3,627 348,335 69,578 407,581 42,394
Transfers in 1,366,084 1,639,211 3,089,286 2,847,900 348,663 1,330,491 1,908,755 1,008,983 851,403 1,743,745
Transfers out (1,469,493) (797,053) (2,778,822) (804,755) (140,000) (441,987) (499,617) (984,809) (130,093) (616,164)
Total other financing sources (uses)6,326,371 845,158 1,677,969 4,133,266 1,031,403 2,392,131 4,157,473 4,954,389 1,128,891 (988,738)
Net change in fund balances 2,642,098$ (943,339)$ 877,783$ 3,310,931$ (1,995,883)$ 612,516$ 4,352,222$ 3,281,229$ (284,292)$ (2,333,502)$
Fund balances - Beginning 15,925,680 18,567,778 17,624,439 18,502,222 21,813,153 19,817,270 20,429,786 24,782,008 28,063,237 27,778,945
Fund balances - Ending 18,567,778$ 17,624,439$ 18,502,222$ 21,813,153$ 19,817,270$ 20,429,786$ 24,782,008$ 28,063,237$ 27,778,945$ 25,445,443$
Debt service as a percentage of
noncapital expenditures 30.2%31.3%20.1%22.0%22.3%16.1%15.5%26.7%18.7%16.5%
Source: City of Rosemount Comprehensive Annual Financial Reports
Fiscal Years
Page 80
Schedule 5
City of Rosemount
Assessed Value (or Tax Capacity) and Estimated Market Value of All Taxable Property
Last Ten Fiscal Years
Total
Tax
Capacity
as % of
Local Tax Estimated Local Tax Estimated Local Tax Estimated City Estimated State Tax
Net Tax Market Net Tax Market Net Tax Market Tax Market Net Tax
Pay-Year Capacity (1)Value Capacity (1)Value Capacity (1)Value Rate (2)Value Capacity (1)
2008 26,171,550$ 2,340,595,000$ 479,034$ 25,165,300$ 26,650,584$ 2,365,760,300$ 42.440 1.13%5,661,820$
2009 26,303,216 2,338,770,100 539,678 28,233,700 26,842,894 2,367,003,800 42.323 1.13%6,048,039
2010 25,067,278 2,209,334,700 566,090 29,516,800 25,633,368 2,238,851,500 43.358 1.14%6,321,515
2011 23,635,880 2,078,373,200 685,721 35,284,800 24,321,601 2,113,658,000 44.661 1.15%6,248,792
2012 21,590,701 1,878,822,866 689,398 35,353,750 22,280,099 1,914,176,616 46.994 1.16%6,203,052
2013 21,076,941 1,829,557,955 728,110 37,319,224 21,805,051 1,866,877,179 48.862 1.17%6,237,507
2014 21,898,381 1,908,586,387 788,742 40,027,970 22,687,123 1,948,614,357 47.676 1.16%6,371,221
2015 23,706,444 2,087,149,995 797,258 40,447,970 24,503,702 2,127,597,965 45.152 1.15%6,429,613
2016 25,325,479 2,241,801,959 893,756 45,278,045 26,219,235 2,287,080,004 43.149 1.15%6,649,004
2017 26,876,375 2,384,213,461 998,770 50,550,481 27,875,145 2,434,763,942 41.832 1.14%6,949,051
Source: Dakota County Assessor's Office, Usage Classification Report - Real Estate and Personal Properties
Note: Property values shown are established at January 1 of the year preceding the "Pay-Year" listed.
They are the basis of the taxes collected and applied to the "Pay-Year".
(1) Beginning with 2011, the State made changes in the valuations by adding a "Market Value Exclusion" for properties valued at less than $414,000 that resulted in large reductions
in the Estimated Market Values and the Net Tax Capacity Values.
(2) Rates taken from Schedule 6
Real Property Personal Property Total
1.10%
1.11%
1.12%
1.13%
1.14%
1.15%
1.16%
1.17%
1.18%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total Tax Capacity as % of
Estimated Market Value
Total %
Page 81
Schedule 6
ISD 196 ISD 199 ISD 200 Dakota Totals
City Market School Market School Market School Market County School School School
Year Referendum District Referendum District Referendum District Referendum Dakota Referendum Special District District District
Collectible City Rates (1)No. 196 Rates (1)No. 199 Rates (1)No. 200 Rates (1)County Rates (1)Districts No. 196 No. 199 No. 200
2008 42.440 0.00623 21.136 0.21274 19.764 0.13159 16.676 0.22733 25.184 0.00471 4.996 93.756 92.384 89.296
2009 42.323 0.00631 21.109 0.21032 19.303 0.13392 16.735 0.22372 25.821 0.00471 4.916 94.169 92.363 89.795
2010 43.358 0.00652 25.391 0.22268 21.795 0.15183 20.206 0.25903 27.269 0.00501 4.987 101.005 97.409 95.820
2011 44.661 0.00697 26.959 0.22601 24.679 0.15606 22.140 0.26626 29.149 0.00537 5.199 105.968 103.688 101.149
2012 46.994 n/a 28.440 0.22131 28.363 0.16428 25.435 0.28618 31.426 0.00551 5.562 112.422 112.345 109.417
2013 48.862 n/a 27.956 0.23542 27.556 0.18354 23.932 0.29483 33.421 n/a 5.884 116.123 115.723 112.099
2014 47.676 n/a 27.606 0.25809 33.418 0.15657 23.052 0.26005 31.827 n/a 5.538 112.647 118.459 108.093
2015 45.152 n/a 23.271 0.25484 34.864 0.16151 20.965 0.25310 29.633 n/a 5.033 103.089 114.682 100.783
2016 43.149 n/a 24.317 0.26999 30.272 0.13929 20.938 0.25990 28.570 n/a 5.063 101.099 107.054 97.720
2017 41.832 n/a 23.336 0.27380 28.572 0.14151 20.305 0.24713 28.004 n/a 4.907 98.079 103.315 95.048
Source: Dakota County Treasurer-Auditor
Note: All rates are overlapping rates except for the "City" and the "City Market Referendum Rates" (these two are the
City's direct rates). Overlapping rates consist of the "School Districts", "Dakota County" and the "Special Districts".
(1) Levies for voter approved referendums are based on market value. Therefore, a separate rate
value. Therefore, a separate rate for these market valued leviesis included for the applicable entity for the
life of the levies. Since these rates are calculated separately, they are not included in the total tax rates.
n/a - Not Applicable
(Rate per 1% of Market Value)
City of Rosemount
Property Tax Rates - All Direct and Overlapping Governmental Units
Last Ten Fiscal Years
Page 82
2017 2008
Percentage Percentage
Local of Total Local of Total
Tax Local Tax Tax Local Tax
Taxpayer Capacity (1)Rank Capacity Capacity (1)Rank Capacity
Flint Hills Resources Pine Bend LLC (Merged w/below)3,105,937$ 1 11.14%995,445$ 2 3.74%
Great Northern Oil Company (2008 - Koch Refining)- 1,537,028 1 5.77%
Northern States Power Co.363,052 2 1.30%308,239 3 1.16%
Northern Natural Gas Co.200,754 3 0.72%-
Clarel Corporation (Cub Foods)184,898 4 0.66%221,498 4
146th Street Partners LP (Waterford Commons)179,939 5 0.65%-
CF Industries Sales LLC (Cenex)125,838 6 0.45%85,810 10 0.32%
Dakota Aggregates 124,746 7 0.45%-
Minnesota Energy Resources Corp.113,284 8 0.41%-
Rosemount Senior Living Associates 108,909 9 0.39%-
Minnesota Pipeline Co.106,138 10 0.38%-
Hawkins Inc.101,502 11 0.36%-
SKB Environmental Inc.87,550 12 0.31%-
Rosemount Crossing LLC (Aldi's)86,962 13 0.31%112,544 5
Francis & Patricia Dolejs (Celtic Crossing)85,408 14 0.31%88,396 9
Proto Labs Inc. (2008 - Webb Properties LLC)84,182 15 0.30%96,812 6 0.36%
Bigos - Rosemount LLC (Cannon Equipment)- 91,248 7 0.34%
Continental Nitrogen & Resources (CNR)- 90,012 8 0.34%
Limerick Way LLC - 85,001 11 0.32%
Hidden Valley SPE LLC (Rosemount Woods)- 79,310 12 0.30%
Progress Land Company - 62,383 13 0.23%
Wensmann Homes Inc.- 45,830 14 0.17%
Koch Exploration Properties LLC - 41,017 15 0.15%
Principal Taxpayers Total 5,059,099$ 18.15%3,940,573$ 14.79%
Total City Tax Capacity 27,875,145$ 26,650,584$
Source: Dakota County Treasurer-Auditor
(1) These figures do not include the dollars collected but the tax capacity for each entity.
Schedule 7
City of Rosemount
Principal Property Tax Payers
Current Year and Nine Years Ago
Page 83
Ratio of
Percent of Delinquent Total Outstanding Total Tax
Total Tax Current Tax Current Taxes Tax Tax Delinquent Collections to
Year Levy (1)Collections Collected Collections (2)Collections Taxes Total Tax Levy
2008 11,368,729$ 11,202,867$ 98.54%128,875$ 11,331,742$ -$ 100.00%
2009 11,411,690 11,279,747 98.84%144,999 11,424,746 - 100.00%
2010 11,160,169 11,059,249 99.10%161,848 11,221,097 6,196 99.94%
2011 10,985,813 10,898,846 99.21%123,066 11,021,912 292 100.00%
2012 10,490,554 10,418,211 99.31%99,300 10,517,511 362 100.00%
2013 10,750,485 10,667,447 99.23%84,910 10,752,357 1,275 99.99%
2014 11,031,983 10,986,828 99.59%110,510 11,097,338 1,436 99.99%
2015 11,313,577 11,279,075 99.70%43,833 11,322,908 7,120 99.94%
2016 11,465,695 11,417,277 99.58%53,354 11,470,631 47,751 99.58%
2017 11,833,975 11,802,700 99.74%73,494 11,876,194 27,440 99.77%
Source: Dakota County Treasurer-Auditor
(1) The total tax levy differs from actual levy certified to the County by the City because of fiscal disparity calculations done by the County after certification.
(2) Delinquent tax collections are all delinquent collections during that tax year - not just for the delinquent collections of that calendar year.
Schedule 8
City of Rosemount
Property Tax Levies and Collections
Last Ten Fiscal Years
Page 84
Schedule 9
Business -
Type
Activities
G.O. and G.O. and
G.O. Property G.O. Tax Revenue Special G.O. Municipal G.O.Total Percentage
Personal Tax Increment Equipment Supported Assessment State Aid Revenue Primary of Personal Per
Year Population(1)Income(1)Supported(2)Supported(2)Certificates(2)(Port Auth.)(2)Supported(2)Supported(2)Bonds(2)Government Income Capita
2008 22,750 1,054,621,750$ 3,760,000$ 6,040,000$ 1,775,000$ 3,350,000$ 6,285,000$ -$ 6,850,000$ 28,060,000$ 2.66%1,233$
2009 23,750 1,053,882,500 3,475,000 6,040,000 1,310,000 1,555,000 5,185,000 - 6,160,000 23,725,000 2.25%999
2010 21,874 988,529,808 3,185,000 6,040,000 760,000 2,820,000 4,275,000 - 6,965,000 24,045,000 2.43%1,099
2011 22,239 1,033,557,525 2,885,000 6,040,000 520,000 2,725,000 4,765,000 - 4,585,000 21,520,000 2.08%968
2012 22,432 1,118,167,904 2,575,000 6,005,000 265,000 1,355,000 5,140,000 - 3,785,000 19,125,000 1.71%853
2013 22,711 1,151,152,457 2,255,000 5,930,000 85,000 1,230,000 5,795,000 - 1,935,000 17,230,000 1.50%759
2014 23,044 1,202,366,788 2,010,000 5,820,000 - 1,105,000 7,180,000 - 1,400,000 17,515,000 1.46%760
2015 23,244 1,248,435,240 3,100,000 9,005,000 - 980,000 5,865,000 - 2,515,000 21,465,000 1.72%923
2016 23,574 1,266,159,540 1,416,281 8,905,469 - 855,000 4,150,000 - 2,172,292 17,499,042 1.38%742
2017 24,295 1,304,884,450 1,278,361 5,394,502 - 720,000 3,460,000 - 1,719,063 12,571,926 0.96%517
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Population and personal income figures are taken from Schedule 14.
(2) Figures taken from City of Rosemount bond documents.
Governmental Activities
City of Rosemount
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Page 85
Schedule 10
Percentage of
Estimated Less Restricted Total Estimated
Market G.O.Debt Service General Market Per
Year Population(1)Value(2)Debt (3)Funds Bonded Debt Value Capita
2008 22,750 2,365,760,300$ 28,060,000$ 866,988$ 27,193,012$ 1.15%1,195$
2009 23,750 2,367,003,800 23,725,000 2,038,321 21,686,679 0.92%913$
2010 21,874 2,238,851,500 24,045,000 1,936,318 22,108,682 0.99%1,011$
2011 22,239 2,113,658,000 21,520,000 1,605,726 19,914,274 0.94%895$
2012 22,432 1,914,176,616 19,125,000 1,129,632 17,995,368 0.94%802$
2013 22,711 1,866,877,179 17,230,000 737,907 16,492,093 0.88%726$
2014 23,044 1,948,614,357 17,515,000 528,504 16,986,496 0.87%737$
2015 23,244 2,127,597,965 21,465,000 5,151,437 16,313,563 0.77%702$
2016 23,574 2,287,080,004 17,499,042 3,469,959 14,029,083 0.61%595$
2017 24,295 2,434,763,942 12,571,926 177,759 12,394,167 0.51%510$
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Population figures are taken from Schedule 14.
(2) Estimated Market Value figures are taken from Schedule 5.
(3) Figures taken from City of Rosemount bond documents.
General Bonded Debt Outstanding
City of Rosemount
Ratios of Net General Bonded Debt Outstanding
Last Ten Fiscal Years
Page 86
City of Rosemount
Governmental Estimated Estimated
Activities Percentage Amount
Debt Applicable Applicable
Governmental Units (1)Outstanding (2)(5)to City (4)to City
Direct Debt:
City of Rosemount 10,852,863$ 100.00%10,852,863$
Overlapping Debt:
School Districts:
I.S.D. 196 - Rosemount 170,005,000 14.60%24,820,730
I.S.D. 199 - Inver Grove Heights 60,495,000 5.60%3,387,720
I.S.D. 200 - Hastings 33,990,000 0.10%33,990
Regional:
Metropolitan Council 10,910,000 (3)0.70%76,370
Total Overlapping Debt 275,400,000$ 28,318,810$
Total Direct & Overlapping Debt 286,252,863$ 39,171,673$
(1) Only those units with outstanding general obligation debt are shown here.
(2) Excludes general obligation tax and aid anticipation certificates and revenue-supported debt.
(3) Excludes general obligation debt supported by wastewater revenues and housing rental payments.
Includes certificates of participation.
(4) Percent of governmental unit within the City of Rosemount's boundaries calculated
by the city's Financial Advisors, Springsted Inc.
(5) The percentage of overlapping debt applicable is estimated using tax capacity. Applicable percentages
were estimated by determining the portion of the governmental unit’s tax capacity that is within the
City’s boundaries and dividing it by the governmental unit’s total tax capacity.
Schedule 11
Direct and Overlapping Governmental Activities Debt
As of December 31, 2017
Page 87
City of Rosemount
Legal Debt Margin Calculation for Fiscal Year 2017
Estimated Market Value 2,434,763,942$
Debt Limitation - 3% of Estimated Market Value 73,042,918
Debt Applicable to Limitation:
Total Bonded Debt 12,345,000$
Less: Special Assessment Bonds 3,460,000$
Tax Increment Bonds 5,305,000
Revenue Bonds 1,645,000
Port Authority Bonds 720,000
Amount Available for Repayment
of G.O. Bonds 177,759 11,307,759
Total Debt Applicable to Limitation 1,037,241
Legal Debt Margin 72,005,677$
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Estimated Market Value 2,365,760,300$ 2,367,003,800$ 2,238,851,500$ 2,113,658,000$ 1,914,176,616$ 1,866,877,179$ 1,948,614,357$ 2,127,597,965$ 2,287,080,004$ 2,434,763,942$
Debt Limit - 3% of Estimated Market Value 70,972,809 71,010,114 67,165,545 63,409,740 57,425,298 56,006,315 58,458,431 63,827,939 68,612,400 73,042,918
Total Net Debt Applicable to Debt Limit 4,668,012 2,746,679 2,008,682 1,799,274 1,710,368 1,602,093 1,481,496 1,298,857 1,184,483 1,037,241
Legal Debt Margin 66,304,797$ 68,263,435$ 65,156,863$ 61,610,466$ 55,714,930$ 54,404,222$ 56,976,935$ 62,529,082$ 67,427,917$ 72,005,677$
Legal debt margin as a percentage of
the debt limit 93.42%96.13%97.01%97.16%97.02%97.14%97.47%97.97%98.27%98.58%
Fiscal Year
Schedule 12
Legal Debt Margin Information
Last Ten Fiscal Years
Page 88
Net Revenue
Available Special
Gross For Debt Assessment
Year Revenue Expenses (1)Service Principal (2)Interest Total Coverage Collections Principal (3)Interest Total Coverage
2008 3,327,919$ 2,616,921$ 710,998$ 1,705,000$ 298,025$ 2,003,025$ 35.50%962,950$ 3,420,000$ 330,859$ 3,750,859$ 25.67%
2009 3,379,397 2,744,735 634,662 690,000 256,788 946,788 67.03%757,223 1,100,000 224,448 1,324,448 57.17%
2010 3,543,743 2,771,544 772,199 740,000 230,836 970,836 79.54%832,686 910,000 184,068 1,094,068 76.11%
2011 3,744,722 2,737,918 1,006,804 2,380,000 218,295 2,598,295 38.75%496,386 1,590,000 147,850 1,737,850 28.56%
2012 4,175,312 2,767,111 1,408,201 800,000 133,478 933,478 150.86%2,155,618 435,000 112,512 547,512 393.71%
2013 4,419,729 2,958,568 1,461,161 1,850,000 110,313 1,960,313 74.54%1,539,059 845,000 103,835 948,835 162.21%
2014 4,195,215 3,262,938 932,277 535,000 53,940 588,940 158.30%2,123,199 1,015,000 97,241 1,112,241 190.89%
2015 4,428,925 3,514,975 913,950 410,000 39,921 449,921 203.14%2,368,403 1,315,000 97,562 1,412,562 167.67%
2016 4,778,063 3,587,124 1,190,939 425,000 52,360 477,360 249.48%1,035,044 1,715,000 77,163 1,792,163 57.75%
2017 3,661,307 1,828,354 1,832,953 445,000 50,560 495,560 369.88%718,051 1,745,000 48,140 1,793,140 40.04%
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Figure does not include depreciation expense.
(2) 2008 includes call payments on 1996B & 1999C bonds, 2011 includes call payments on 2001B, 2002B & 2003B bonds and 2013 includes call payment on 2005C bonds.
(3) 2008 includes call/defeasance program for 1999B & 2001A bonds and 2011 includes calls for 2002A & 2003A bonds.
Debt Service Requirements
City of Rosemount
G.O. Revenue Bonds
Debt Service Requirements
Schedule 13
Pledged-Revenue Coverage
Last Ten Fiscal Years
G.O. Special Assessment Bonds
Page 89
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)
2008 22,750 46,357$ 1,054,621,750$ 4,623 6.1%36.1
2009 23,750 44,374 1,053,882,500 5,266 7.0%36.2
2010 21,874 45,192 988,529,808 5,179 6.3%36.7
2011 22,239 46,475 1,033,557,525 4,745 5.2%37.2
2012 22,432 49,847 1,118,167,904 4,860 4.8%37.5
2013 22,711 50,687 1,151,152,457 4,889 4.1%37.4
2014 23,044 52,177 1,202,366,788 4,910 3.2%36.8
2015 23,244 53,710 1,248,435,240 5,074 3.0%37.3
2016 23,574 53,710 1,266,159,540 5,181 3.4%37.3
2017 24,295 53,710 1,304,884,450 5,066 2.7%37.3
(1) 2010 is a regular decennial census figure. All years from 2008 and on (except for 2010) are the City staff's best estimates
as of 12/31 of each year to give a more indicative estimate of the actual population.
(2) These figures are provided by and are for Dakota County. These figures usually have a 2 to 3-year lag time
so that is why the two most current years use the 2015 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. The total school enrollment includes
the total number of students with homes in the City of Rosemount.
(5) Unemployment rates were compiled by the Minnesota Local Area Unemployment Statistics (LAUS) - for Dakota County.
(6) These figures are provided by Dakota County.
2015's median age is the most current information available so 2016 & 2017 shown as the same age.
Page 90
2017 2008
Percentage Percentage
of Total of Total
City City
Employer 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.
Current Year and Nine Years Ago
Schedule 15
City of Rosemount
Principal Employers
Page 91
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function/Program
General Government
Administration 4.50 4.50 4.50 4.50 3.50 3.50 3.50 3.50 4.50 4.50
Finance 4.50 4.30 4.30 4.30 4.30 4.30 4.55 4.55 4.55 4.55
Community Development 10.50 10.50 9.75 9.75 9.50 9.50 9.50 9.50 9.50 9.50
Police
Sworn Officers 22.00 22.00 22.00 22.00 22.00 22.00 23.00 23.00 23.00 24.00
Non-Sworn Employees 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.00 3.00 3.00
Fire
Firefighters and Officers 43.00 44.00 43.00 43.00 41.00 43.00 42.00 45.00 52.00 47.00
Public Works
Building Maintenance - - - - 0.80 0.80 0.80 0.85 0.85 1.25
Fleet Maintenance 2.10 2.10 2.10 2.10 2.20 2.20 2.20 2.30 2.30 2.30
Street Maintenance 6.60 6.60 6.40 6.40 5.80 5.80 5.80 6.00 6.00 6.00
Parks Maintenance 5.60 5.60 5.60 5.60 4.60 4.60 4.60 4.65 4.65 5.00
Parks and Recreation
Parks & Rec 9.50 9.50 9.50 9.50 9.50 9.50 9.50 9.50 10.25 10.25
Arena 1.80 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85
Utilities
Water 5.33 5.13 5.13 4.83 4.68 4.68 4.68 4.88 4.88 4.88
Sewer 5.33 5.13 5.13 4.83 4.68 4.68 4.68 4.88 4.88 4.88
Storm Water 2.25 2.30 2.30 2.10 2.10 2.10 2.10 2.30 2.30 2.55
126.25 126.76 124.81 124.01 119.75 121.75 122.00 125.75 134.50 131.50
Sources: Finance Department
Note: Employees listed are full-time and permanent part-time employees. Seasonal and temporary positions are not included.
Fiscal Year
Schedule 16
City of Rosemount
Full-Time/Permanent Part-Time City Government Employees by Function/Program
Last Ten Fiscal Years
Page 92
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function/Program
General Government
Total Permits Issued by the Building Department 3,389 2,366 2,400 2,359 2,251 2,471 2,879 2,677 3,033 3,136
Total Number of Inspections Conducted 5,774 4,572 4,311 4,048 3,553 4,296 4,618 5,467 5,927 5,425
Police
Number of Calls for Service 16,105 16,354 14,432 14,554 14,346 13,730 15,538 16,894 16,691 16,194
Number of Patrol Miles 209,310 206,619 211,460 152,097 194,764 186,490 195,393 204,226 185,101 186,155
Adult Arrests 646 424 340 432 369 312 230 465 326 406
Juvenile Arrests 239 206 182 146 107 102 101 88 105 85
Traffic Violations 1,522 1,548 1,605 2,232 2,610 2,147 2,452 1,872 1,939 1,372
Parking Violations 160 307 284 296 378 436 197 207 271 88
Fire
Number of Calls Answered 769 632 630 690 724 637 715 710 720 744
Fires Extinguished 5 59 34 n/a 34 52 35 38 33 38 60
Public Works
Street Resurfacing (Miles)1.20 0.64 10.50 1.30 2.30 1.60 1.20 - 1.20 1.95
Park Acres Mowed 127 127 134 134 154 154 154 154 160 160
Parks and Recreation
Overall Program Participation 14,000 14,200 14,500 14,500 14,500 15,000 15,000 15,200 15,200 15,200
Hours of Ice Time Used 2,545 2,466 2,577 2,515 2,577 2,479 2,378 2,670 2,678 2,805
Water
Connections 6,188 6,273 6,381 6,431 7,464 7,576 7,701 7,827 7,938 8,107
Water Main Breaks - - - - - 1 1 2 1 1
Average Daily Consumption (In Gallons)2,494,238 2,569,474 2,261,972 2,344,546 2,665,979 2,412,638 2,233,593 2,227,616 2,520,915 2,530,849
Sewer
Connections 6,170 6,255 6,363 6,414 6,505 6,614 6,734 6,857 6,968 7,050
Sources: Various City departments.
Fiscal Year
Schedule 17
City of Rosemount
Operating Indicators by Function/Program
Last Ten Fiscal Years
Page 93
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Function/Program
General Government
City Halls/Other Buildings 1 1 1 1 1 1 1 1 1 1
Police
Stations 1 1 1 1 1 1 1 1 1 1
Patrol Units (Marked/Unmarked)9/4 9/4 9/4 9/4 9/4 9/4 8/6 9/6 9/6 10/6
Fire
Stations 2 2 2 2 2 2 2 2 2 2
Fire Units (Vehicles & Trailer)14 14 14 14 14 15 15 15 16 16
Public Works
Buildings 3 3 3 3 3 3 3 3 3 3
City Maintained Streets (Miles)102 103 103 103 105 106 108 110 110 113
Street Lights 1,300 1,488 1,500 1,500 1,510 1,520 1,539 1,561 1,568 1,599
Parks and Recreation
Community Centers 1 1 1 1 1 1 1 1 2 2
Shelters/Other Buildings 3 3 3 3 3 3 3 3 3 3
Acreage 430 440 440 467 467 534 533 533 540 540
Parks 26 27 27 28 28 27 29 29 30 30
Playgrounds 19 20 20 20 20 20 21 21 21 21
Baseball/Softball Diamonds 19 20 20 20 22 23 23 23 24 24
Soccer/Football Fields 13 16 16 16 16 19 19 19 20 20
Tennis Courts 6 8 8 8 8 8 12 12 12 12
Water
Water Mains (Miles)119 122 122 125 127 129 130 130 134 140
Wells (Municipal/Rural)7 8 8 8 8 8 8 8 8 8
Water Towers 4 4 4 4 4 4 4 4 4 4
Fire Hydrants 1,279 1,281 1,330 1,342 1,342 1,366 1,412 1,420 1,445 1,458
Storage Capacity 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000
Maximum Pumping Capacity 10,994,000 12,096,000 12,096,000 12,096,000 12,096,000 12,096,000 12,096,000 12,384,000 12,384,000 12,384,000
Sewer
Sanitary Sewer Mains (Miles)90 91 91 95 97 98 98 98 106 103
Storm Sewer Mains (Miles)81 82 84 84 86 86 88 89 91 105
Public Education Facilities:
Number of Elementary Schools 2 2 2 2 2 2 2 2 2 2
Number of Secondary Schools 2 2 2 2 2 2 2 2 2 2
Number of Special Education Schools 1 2 2 2 2 2 2 2 2 2
(Dakota County Technical College)
Sources: Various City departments.
Fiscal Year
Schedule 18
City of Rosemount
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Page 94
Management Report
for
City of Rosemount, Minnesota
December 31, 2017
THIS PAGE INTENTIONALLY LEFT BLANK
C ERTIFIED
A CCOUNTANTS
P UBLIC
PRINCIPALS
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA/CMA
Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com
To the City Council and Management
City of Rosemount, Minnesota
We have prepared this management report in conjunction with our audit of the City of Rosemount,
Minnesota’s (the City) financial statements for the year ended December 31, 2017. We have organized
this report into the following sections:
• Audit Summary
• Governmental Funds Overview
• Enterprise Funds Overview
• Government-Wide Financial Statements
• Legislative Updates
• Accounting and Auditing Updates
We would be pleased to further discuss any of the information contained in this report or any other
concerns that you would like us to address. We would also like to express our thanks for the courtesy and
assistance extended to us during the course of our audit.
The purpose of this report is solely to provide those charged with governance of the City, management,
and those who have responsibility for oversight of the financial reporting process comments resulting
from our audit process and information relevant to city finances in Minnesota. Accordingly, this report is
not suitable for any other purpose.
Minneapolis, Minnesota
May 7, 2018
THIS PAGE INTENTIONALLY LEFT BLANK
-1-
AUDIT SUMMARY
The following is a summary of our audit work, key conclusions, and other information that we consider
important or that is required to be communicated to the City Council, administration, or those charged
with governance of the City.
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED
STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of and for the year ended
December 31, 2017, and the related notes to the financial statements. Professional standards require that
we provide you with information about our responsibilities under auditing standards generally accepted in
the United States of America and Government Auditing Standards, as well as certain information related
to the planned scope and timing of our audit. We have communicated such information to you verbally
and in our audit engagement letter. Professional standards also require that we communicate the following
information related to our audit.
PLANNED SCOPE AND TIMING OF THE AUDIT
We performed the audit according to the planned scope and timing previously discussed and coordinated
in order to obtain sufficient audit evidence and complete an effective audit.
AUDIT OPINION AND FINDINGS
Based on our audit of the City’s financial statements for the year ended December 31, 2017:
• We have issued an unmodified opinion on the City’s basic financial statements.
• We reported one matter involving the City’s internal control over financial reporting that we
consider to be a significant deficiency. Due to the limited size of the City’s office staff, the City
has limited segregation of duties in certain areas.
• The results of our testing disclosed no instances of noncompliance that are required to be reported
under Government Auditing Standards.
• We reported one finding based on our testing of the City’s compliance with Minnesota laws and
regulations. We noted that a withholding affidavit was not obtained from the contractor prior to
the final payment being made on one contract as required by Minnesota Statutes § 270C.66.
FOLLOW-UP ON PRIOR YEAR FINDINGS AND RECOMMENDATIONS
As a part of our audit of the City’s financial statements for the year ended December 31, 201 7, we
performed procedures to follow-up on the findings and recommendations that resulted from our prior year
audit. We reported the following finding that was corrected by the City in the current year:
• In the prior year audit, we reported that 1 of 40 claims tested was not paid within 35 days of the
receipt of goods or services, or receipt of the invoice for goods or services, as required by state
statutes. Based on testing performed, this was not a finding in the current year.
-2-
SIGNIFICANT ACCOUNTING POLICIES
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 of the notes to the basic financial statements.
No new accounting policies were adopted and the application of existing policies was not changed during
the year ended December 31, 2017; however, the City implemented the following governmental
accounting standards during the fiscal year:
• Governmental Accounting Standards Board (GASB) Statement No. 79, Certain External
Investment Pools and Pool Participants, which enhanced disclosures regarding investments.
• GASB Statement No. 82, Pension Issues, an amendment of GASB Statements No. 67, No. 68, and
No. 73, which addressed certain issues related to pension reporting and disclosures.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management’s knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the financial statements were:
• Depreciation – Management’s estimates of depreciation expense are based on the estimated
useful lives of the assets.
• Compensated Absences – Management’s estimate is based on current rates of pay and balances
for compensated absences.
• Pension Benefits – The City has recorded liabilities and activities for pension benefits. Actuarial
estimates of the net pension liabilities are calculated using actuarial methodologies described in
GASB Statement No. 68. The actuarial calculations include significant assumptions, including
projected changes, investment returns, retirement ages, proportionate share, and employee
turnover.
We evaluated the key factors and assumptions used by management to develop these estimates in
determining that they are reasonable in relation to the basic financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
CORRECTED AND UNCORRECTED MISSTATEMENTS
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are clearly trivial, and communicate them to the appropriate level of
management. Where applicable, management has corrected all such misstatements. In addition, none of
the misstatements detected as a result of audit procedures and corrected by management, when applicable,
were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as
a whole.
-3-
DISAGREEMENTS WITH MANAGEMENT
For purposes of this report, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during the
course of our audit.
MANAGEMENT REPRESENTATIONS
We have requested certain representations from management that are included in the management
representation letter dated May 7, 2018.
MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a “second opinion” on certain situations . If a consultation involves
application of an accounting principle to the City’s financial statements or a determination of the type of
auditor’s opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts . To our
knowledge, there were no such consultations with other accountants.
OTHER AUDIT FINDINGS OR ISSUES
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City’s auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
OTHER MATTERS
We applied certain limited procedures to the management’s discussion and analysis and the remaining
required supplementary information (RSI) that supplements the basic financial statements. Our
procedures consisted of inquiries of management regarding the methods of preparing the information and
comparing the information for consistency with management’s responses to our inquiries, the basic
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the combining and individual fund statements and schedules, reported as
supplementary information accompanying the financial statements, which are not RSI. With respect to
this supplementary information, we made certain inquiries of management and evaluated the form,
content, and methods of preparing the information to determine that the information complies with
accounting principles generally accepted in the United States of America, the method of preparing it has
not changed from the prior period, and the information is appropriate and complete in relation to our audit
of the financial statements. We compared and reconciled the supplementary information to the underlying
accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory and statistical sections, which accompany the financial
statements, but are not RSI. Such information has not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on it.
-4-
GOVERNMENTAL FUNDS OVERVIEW
This section of the report provides you with an overview of the financial trends and activities of the City’s
governmental funds, which includes the General, special revenue, debt service, and capital project funds.
These funds are used to account for the basic services the City provides to all of its citizens, which are
financed primarily with property taxes. The governmental fund information in the City’s financial
statements focuses on budgetary compliance and the sufficiency of each governmental fund’s current
assets to finance its current liabilities.
PROPERTY TAXES
Minnesota cities rely heavily on local property tax levies to support their governmental fund activities.
For the 2016 fiscal year, local ad valorem property tax levies provided 39.8 percent of the total
governmental fund revenues for cities over 2,500 in population, and 36.4 percent for cities under 2,500 in
population.
The total market value of property in Minnesota cities increased about 5.6 percent for the 2017 levy year,
which followed an increase of 5.7 percent for levy year 2016. The market values used for levying
property taxes are based on the previous fiscal year (e.g., market values for taxes levied in 2017 were
based on assessed values as of January 1, 2016), so the trend of change in these market values lags
somewhat behind the housing market and economy in general.
The City’s estimated market value increased 7.5 percent for taxes payable in 2016 and increased
6.5 percent for taxes payable in 2017. The following graph shows the City’s changes in estimated market
value over the past 10 years:
$–
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
$2,500,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Estimated Market Value
-5-
Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s
property classification system to each property’s market value. Each property classification, such as
commercial or residential, has a different calculation and uses different rates. Consequently, a city’s total
tax capacity will change at a different rate than its total market value, as tax capacity is affected by the
proportion of its tax base that is in each property classification from year-to-year, as well as legislative
changes to tax rates. The City’s tax capacity increased 7.0 percent for 2016 and 6.3 percent for 2017.
The following graph shows the City’s change in tax capacities over the past 10 years:
$–
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Taxable Tax Capacity
The following table presents the average tax rates applied to city residents for each of the last three levy
years, along with comparative state-wide and metro area average rates from the two most recent years for
which the information is available:
2015 2016 2015 2016 2015 2016 2017
Average tax rate
City 46.9 46.5 43.4 43.0 45.2 43.1 41.8
County 44.7 44.1 42.9 42.3 29.6 28.6 28.0
School 27.1 27.5 28.3 28.6 24.1 24.7 23.3
Special taxing 6.9 6.9 8.8 8.7 5.0 5.1 4.9
Total 125.6 125.0 123.4 122.6 103.9 101.5 98.0
Note: State-wide and metro area average tax rates are not available for 2017.
Rates Expressed as a Percentage of Net Tax Capacity
State-Wide Metro Area
City of
Rosemount
All Cities Seven-County
The improvement in tax capacity values previously discussed, contributed to the decrease in the City’s
average tax rate presented in the table above.
-6-
GOVERNMENTAL FUND BALANCES
The following table summarizes the changes in the fund balances of the City’s governmental funds during
the year ended December 31, 2017, presented both by fund balance classification and by fund:
Increase
2017 2016 (Decrease)
Fund balances of governmental funds
Total by classification
Nonspendable 444$ 10,113$ (9,669)$
Restricted 4,854,162 9,301,251 (4,447,089)
Committed 230,162 181,276 48,886
Assigned 13,026,932 11,367,472 1,659,460
Unassigned 7,333,743 6,918,833 414,910
Total – governmental funds 25,445,443$ 27,778,945$ (2,333,502)$
Total by fund
General 9,556,250$ 9,888,534$ (332,284)$
Debt Service 2,983,348 4,307,191 (1,323,843)
Capital Projects 10,804,425 8,407,771 2,396,654
Port Authority TIF 1,849,055 4,994,060 (3,145,005)
Nonmajor funds 252,365 181,389 70,976
Total – governmental funds 25,445,443$ 27,778,945$ (2,333,502)$
as of December 31,
Governmental Funds Change in Fund Balance
Fund Balance
In total, the fund balances of the City’s governmental funds decreased by $2,333,502 during the year
ended December 31, 2017.
The largest changes were in restricted and assigned fund balances as noted in the table above. Fund
balances restricted for the Debt Service Fund and the Port Authority TIF Fund decreased by $1,323,843
and $3,145,005, respectively. The City’s use of refunding bond proceeds and scheduled debt payments
contributed to the decrease in restricted fund balances. Fund balance assigned for various
projects/equipment and building CIP increased by a total of $1,975,182, accounting for a majority of the
change in this category.
-7-
GOVERNMENTAL FUNDS REVENUES
The following table presents the per capita revenue of the City’s governmental funds for the past
three years, along with state-wide averages.
We have included the most recent comparative state-wide averages available from the Office of the State
Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the typical
major sources of governmental fund revenue will naturally vary between cities based on factors such as a
city’s stage of development, location, size and density of its population, property values, services it
provides, and other attributes. It will also differ from year-to-year due to the effect of inflation and
changes in its operation. Also, certain data in these tables may be classified differently than how they
appear in the City’s financial statements in order to be more comparable to the state-wide information,
particularly in separating capital expenditures from current expenditures.
We have designed this section of our management report using per capita data in order to better identify
unique or unusual trends and activities of the City. We intend for this type of comparative and trend
information to complement, rather than duplicate, information in the management’s discussion and
analysis. An inherent difficulty in presenting per capita information is the accuracy of the population
count, which for most years is based on estimates.
Year 2015 2016 2017
Population 2,500–10,000 10,000–20,000 20,000–100,000 23,244 23,574 24,295
Property taxes 460$ 432$ 455$ 460$ 463$ 466$
Tax increments 26 26 42 31 34 34
Franchise and other taxes 35 43 45 11 11 11
Special assessments 59 44 59 102 44 30
Licenses and permits 35 33 42 30 34 31
Intergovernmental revenues 313 275 152 38 29 50
Charges for services 110 92 103 144 120 142
Other 91 57 54 58 26 68
Total revenue 1,129$ 1,002$ 952$ 874$ 761$ 832$
December 31, 2016
City of RosemountState-Wide
Governmental Funds Revenue per Capita
With State-Wide Averages by Population Class
The City’s governmental fund revenues for 2017 were $20,205,109, an increase of $2,298,701
(12.8 percent) from the prior year. On a per capita basis, the City received $832 in governmental fund
revenue for 2017, an increase of $71 from the prior year.
A city’s stage of development, along with the way a city finances various capital projects, will impact the
mix of revenue sources it receives. The largest change in the table above occurred in the other category of
revenues, which increased $42 per capita from the prior year. Charges for services increased by $22 per
capita. The increases in the other and charges for services sources of revenues were primarily in increased
activity in the Capital Projects Fund in the current year. Intergovernmental sources increased $21 per
capita from the prior year with more municipal state aid construction funds in the current year. Special
assessment revenue decreased with less prepayments on assessed projects in the current year compared to
the prior year.
-8-
GOVERNMENTAL FUND EXPENDITURES
The expenditures of governmental funds will also vary from state-wide averages and from year-to-year,
based on the City’s circumstances. Expenditures are classified into three types as follows:
Current – These are typically the general operating type expenditures occurring on an annual
basis, and are primarily funded by general sources such as taxes and intergovernmental revenues.
Capital Outlay and Construction – These expenditures do not occur on a consistent basis, more
typically fluctuating significantly from year-to-year. Many of these expenditures are
project-oriented, and are often funded by specific sources that have benefited from the
expenditure, such as special assessment improvement projects.
Debt Service – Although the expenditures for debt service may be relatively consistent over the
term of the respective debt, the funding source is the important factor. Some debt may be repaid
through specific sources such as special assessments or redevelopment funding, while other debt
may be repaid with general property taxes.
The City’s expenditures per capita of its governmental funds for the past three years, together with
state-wide averages, are presented in the following table:
Year 2015 2016 2017
Population 2,500–10,000 10,000–20,000 20,000–100,000 23,244 23,574 24,295
Current
General government 145$ 114$ 97$ 122$ 126$ 134$
Public safety 263 250 273 173 173 177
Streets and highways 126 123 95 127 127 170
Parks and recreation 93 109 95 56 64 64
All other 74 77 91 – – –
Total current 701 673 651 478 490 545
Capital outlay
and construction 381 370 301 294 216 234
Debt service
Principal 196 163 115 149 92 92
Interest and fiscal 48 38 34 25 21 16
Total debt service 244 201 149 174 113 108
Total expenditures 1,326$ 1,244$ 1,101$ 946$ 819$ 887$
December 31, 2016
State-Wide
Governmental Funds Expenditures per Capita
With State-Wide Averages by Population Class
City of Rosemount
Total expenditures in the City’s governmental funds for 2017 were $21,549,873, an increase of
$2,230,282 (11.5 percent) from the prior year. On a per capita basis, the City expended a total of $887 in
2017, an increase of $68 from the previous year.
As the above table reflects, the City’s expenditures per capita have historically been below the state-wide
average. The largest changes occurred in streets and highways and capital outlay spending compared to
the prior year. Streets and highways spending increased with scheduled wage and benefit increases, street
improvement, and maintenance approved for the current year. Capital outlay and construction increased
primarily due to the timing of projects that fluctuate from year-to-year.
-9-
GENERAL FUND
The City’s General Fund accounts for the financial activity of the basic services provided to the
community. The primary services included within this fund are the administration of the municipal
operation, police and fire protection, building inspection, streets and highway maintenance, and culture
and recreation. The graph below illustrates the change in the General Fund financial position over the last
five years. We have also included a line representing annual revenues to reflect the change in the size of
the General Fund operation over the same period.
2013 2014 2015 2016 2017
Fund Balance $8,361,151 $9,163,647 $9,557,677 $9,888,534 $9,556,250
Cash (Net)$8,205,058 $9,145,098 $9,694,642 $10,397,380 $10,130,901
Revenue $10,656,732 $12,016,858 $11,997,352 $12,409,954 $12,669,945
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
General Fund Financial Position
Year Ended December 31,
The City’s General Fund cash and investments balance at December 31, 2017 was $10,130,901, a
decrease of $266,479 from the previous year. Total fund balance at year-end was $9,556,250, a decrease
of $332,284 from the prior year.
As the graph illustrates, the City has generally been able to maintain healthy cash and fund balance levels
as the volume of financial activity has fluctuated. This is an important factor because a government, like
any organization, requires a certain amount of equity to operate. A healthy financial position allows the
City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allo ws for the
adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in determining
the City’s bond rating and resulting interest costs. Maintaining an adequate fund balance has become
increasingly important given the fluctuations in state funding for cities in recent years.
A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the
unusual cash flow experienced throughout the year. The City’s General Fund cash disbursements are
made fairly evenly during the year other than the impact of seasonal services such as snowplowing, street
maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Taxes
comprise about 77 percent of the fund’s total annual revenue. Approximately half of these revenues are
received by the City in July and the rest in December. Consequently, the City needs to have adequate cash
reserves to finance its everyday operations between these payments.
The City’s unassigned General Fund balance at the end of the 2017 fiscal year represents approximately
56 percent of annual expenditures based on projected 2018 levels.
-10-
The following graph reflects the City’s General Fund revenue sources for 2017 compared to budget:
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
Taxes Licenses and
Permits
Intergovernmental Charges
for
Services
Other
General Fund Revenue –Budget and Actual (Budgetary Basis)
Actual Budget
General Fund revenue for 2017 was $12,669,945, which was $243,846 (2.0 percent) more than budget.
Favorable variances in every category, due in part to conservative budgeting, contributed to the overall
revenue variance. Licenses and permits were over budget with more building permit activity than
expected. Intergovernmental revenue exceeded budget with the recognition of various local government
grants that were not anticipated in the final budget. The City had more charges for services revenue than
expected, with an increase in other highway and street revenue related to volume of activity. Other also
ended the year with actual sources coming in over budget ($57,574), as presented in the graph above.
The following graph presents the City’s General Fund revenues by source for the last five years . The
graph reflects the City’s reliance on property and other taxes, which represented 77 percent of General
Fund revenues in 2017:
Taxes Intergovernmental All Other
2013 $8,865,223 $318,986 $1,472,523
2014 $9,060,134 $342,158 $2,614,566
2015 $9,185,173 $459,069 $2,353,110
2016 $9,397,523 $596,817 $2,415,614
2017 $9,750,637 $417,036 $2,502,272
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
General Fund Revenue by Source
Year Ended December 31,
Total General Fund revenue for 2017 was $259,991 (2.1 percent) more than last year. Taxes increased by
$353,114, due to an increase in the approved tax levy. Intergovernmental revenue was $179,781 less than
last year with a Safe Routes to School Grant recognized in the prior year. Remaining revenue sources of
the General Fund were $86,658 more than 2016, due to increasing charges for services and investment
earnings sources.
-11-
The following graph illustrates the components of General Fund spending for 2017 compared to budget:
$–
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
General
Government
Public Safety Public Works Parks and
Recreation
Capital Outlay
General Fund Expenditures –Budget and Actual (Budgetary Basis)
Actual Budget
General Fund expenditures for 2017 on a budgetary basis were $12,049,104, which was $250,495
(2.0 percent) less than budget. City efforts to maintain fiscal responsibility and spend within approved
appropriations contributed to the expenditure variance. Savings in general government, public safety, and
public works, more than offset the parks and recreation and capital outlay spending in excess of budget.
The following graph presents the City’s General Fund expenditures by function for the last five years:
General
Government Public Safety Public Works Parks and
Recreation Capital Outlay
2013 $2,311,356 $3,604,213 $3,250,244 $1,321,946 $1,865
2014 $2,509,554 $3,762,826 $3,165,615 $1,304,867 $–
2015 $2,589,416 $4,014,411 $2,940,423 $1,298,271 $146,924
2016 $2,769,172 $4,072,189 $3,002,678 $1,516,720 $591,931
2017 $3,035,701 $4,306,808 $3,900,699 $1,546,723 $68,105
$–
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
General Fund Expenditures by Function
Year Ended December 31,
Total General Fund expenditures for 2017 on an accounting principles generally accepted in the United
States of America-basis were $905,346 (7.6 percent) more than the previous year. Public works increased
with increased spending on parking lot improvements. Natural inflationary adjustments also contributed
to the overall increase in expenditures. Capital outlay in the General Fund decreased significantly due to
one-time grant spending in the prior year.
-12-
ENTERPRISE FUNDS OVERVIEW
The City maintains several enterprise funds to account for services the City provides that are financed
primarily through fees charged to those utilizing the service. This section of the report provides you with
an overview of the financial trends and activities of the City’s enterprise funds, which include the Water,
Sewer, Storm Water, and Arena Funds.
The utility funds comprise a considerable portion of the City’s activities . These funds help to defray
overhead and administrative costs and provide additional support to general government operations by
way of annual transfers. We understand that the City is proactive in reviewing these activities on an
ongoing basis and we want to reiterate the importance of continually monitoring these operations. Over
the years, we have emphasized to our city clients the importance of these utility operations being
self-sustaining, preventing additional burdens on general government funds . This would include the
accumulation of net position for future capital improvements and to provide a cushion in the event of a
negative trend in operations.
ENTERPRISE FUNDS FINANCIAL POSITION
The following table summarizes the changes in the financial position of the City’s enterprise funds during
the year ended December 31, 2017, presented both by classification and by fund:
Increase
2017 2016 (Decrease)
Net position of enterprise funds
Total by classification
Net investment in capital assets 97,328,281$ 98,722,624$ (1,394,343)$
Unrestricted 23,521,090 21,739,120 1,781,970
Total – enterprise funds 120,849,371$ 120,461,744$ 387,627$
Total by fund
Water 42,351,012$ 41,926,578$ 424,434$
Sewer 34,585,434 34,875,309 (289,875)
Storm Water 42,133,934 41,964,655 169,279
Arena 1,778,991 1,695,202 83,789
Total – enterprise funds 120,849,371$ 120,461,744$ 387,627$
Enterprise Funds Change in Financial Position
Net Position
as of December 31,
In total, the net position of the City’s enterprise funds increased by $387,627 during the year ended
December 31, 2017. The increase in net position is primarily related to connection fees and capital
contributions recognized in the current year.
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WATER FUND
At December 31, 2017, the Water Fund had a cash balance (net of borrowing) of $10,121,357 and total
net position of $42,351,012. Of this net position total, $33,098,696 is the investment in capital assets,
while unrestricted has a balance of $9,252,316. The following graph shows the financial position of the
Water Fund over the past five years:
$–
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
2013 2014 2015 2016 2017
Water Fund Financial Position
Year Ended December 31,
Cash, Net of Interfund Loans Total Net Position Operating Revenue
The following graph shows the operating results of the Water Fund over the last five years:
$–
$250,000
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
$2,000,000
$2,250,000
$2,500,000
2013 2014 2015 2016 2017
Water Fund Operating Results
Year Ended December 31,
Operating Expenses Operating Revenue
The Water Fund maintains a healthy financial position. During fiscal 2017, the Water Fund recognized
operating income of $231,084, compared to an operating loss of $138,793 in fiscal 2016. The increase in
operating revenue was due to a combination of higher rates and usage in the current year. Consumption
will fluctuate from year-to-year based on many factors, including weather patterns and the number of
utility customers. The City should continue to review utility rates during its annual budget process to
make sure an adequate, yet fair rate is charged for the services provided.
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SEWER FUND
At December 31, 2017, the Sewer Fund had a cash balance (net of borrowing) of $6,453,944 and total net
position of $34,585,434. Of this net position total, $27,868,803 is the investment in capital assets, while
$6,716,631 is unrestricted. The following graph shows the financial position of the Sewer Fund over the
past five years:
$–
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
2013 2014 2015 2016 2017
Sewer Fund Financial Position
Year Ended December 31,
Cash, Net of Interfund Loans Total Net Position Operating Revenue
The following graph shows the operating results of the Sewer Fund for the last five years:
$–
$250,000
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
$2,000,000
$2,250,000
$2,500,000
$2,750,000
$3,000,000
2013 2014 2015 2016 2017
Sewer Fund Operating Results
Year Ended December 31,
MCES Costs Other Operating Expenses Operating Revenue
The major expense of the sanitary sewer operation is the charge from the Metropolitan Council
Environmental Services (MCES). The main cause of the expense fluctuations from year-to-year, shown
on the graph above, are generally changes made to the charges from the MCES, reflecting the results of
its sewer treatment operations.
During fiscal 2017, the Sewer Fund reported an operating loss of $970,774, compared to an operating loss
of $1,032,156 in fiscal 2016. An increase in rates and users contributed to the growth in operating revenue
in the current year. The City should continue to review utility rates during its annual budget process to
make sure an adequate, yet fair rate is charged for the services provided.
-15-
STORM WATER FUND
At December 31, 2017, the Storm Water Fund had a cash balance of $6,897,231 and total net position of
$42,133,934. Of this net position total, $34,930,601 is the investment in capital assets, while $7,203,333
is unrestricted. The following graph shows the financial position of the Storm Water Fund over the past
five years:
$–
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
2013 2014 2015 2016 2017
Storm Water Fund Financial Position
Year Ended December 31,
Cash, Net of Interfund Loans Total Net Position Operating Revenue
The following graph shows the operating results of the Storm Water Fund for the last five years:
$–
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
$1,400,000
2013 2014 2015 2016 2017
Storm Water Fund Operating Results
Year Ended December 31,
Operating Expenses Operating Revenue
The Storm Water Fund has been near break-even operating results most of the past five years, as
presented in the table above. The Storm Water Fund maintains a healthy financial position. During fiscal
2017, the Storm Water Fund reported operating income of $33,356, compared to an operating loss of
$43,436 in fiscal 2016. An increase in rates and customers contributed to the change in current year
operations.
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ARENA FUND
At December 31, 2017, the Arena Fund had a cash balance of $525,826 and total net position of
$1,778,991. Of this net position total, $1,430,181 is the investment in capital assets, while $348,810 is
unrestricted. The following graph shows the financial position of the Arena Fund over the past five years:
$–
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
2013 2014 2015 2016 2017
Arena Fund Financial Position
Year Ended December 31,
Cash, Net of Interfund Loans Total Net Position Operating Revenue
The following graph shows the operating results of the Arena Fund for the last five years:
$–
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
$600,000
2013 2014 2015 2016 2017
Arena Fund Operating Results
Year Ended December 31,
Operating Expenses Operating Revenue
During fiscal 2017, the Arena Fund reported an operating loss of $43,844, compared to an operating loss
of $80,865 in fiscal 2016. After investment earnings of $1,133 and net transfers in of $126,500, net
position increased by $83,789.
-17-
GOVERNMENT-WIDE FINANCIAL STATEMENTS
In addition to fund-based information, the current reporting model for governmental entities also requires
the inclusion of two government -wide financial statements designed to present a clear picture of the City
as a single, unified entity. These government-wide financial statements provide information on the total
cost of delivering services, including capital assets and long-term liabilities.
STATEMENT OF NET POSITION
The Statement of Net Position essentially tells you what the City owns and owes at a given point in time,
the last day of the fiscal year. Theoretically, net position represents the resources the City has leftover to
use for providing services after its debts are settled. However, those resources are not always in spendable
form, or there may be restrictions on how some of those resources can be used. Therefore, net position is
divided into three components: net investment in capital assets, restricted, and unrestricted.
• Net Investment in Capital Assets – The portion of net position reflecting equity in capital assets
(i.e., capital assets minus related debt).
• Restricted Net Position – The portion of net position equal to resources whose use is l egally
restricted minus any noncapital-related liabilities payable from those same resources.
• Unrestricted Net Position – The residual balance of net position after the elimination of net
investment in capital assets and restricted net position.
The following table presents the components of the City’s net position as of December 31, 2017 and
2016, for governmental activities and business-type activities:
Increase
2017 2016 (Decrease)
Net position
Governmental activities
Net investment in capital assets 74,294,033$ 69,942,544$ 4,351,489$
Restricted 7,151,722 7,113,065 38,657
Unrestricted 14,090,028 13,100,682 989,346
Total governmental activities 95,535,783 90,156,291 5,379,492
Business-type activities
Net investment in capital assets 97,328,281 98,722,624 (1,394,343)
Unrestricted 23,521,090 21,739,120 1,781,970
Total business-type activities 120,849,371 120,461,744 387,627
Total net position 216,385,154$ 210,618,035$ 5,767,119$
As of December 31,
The City’s total net position at December 31, 2017 was $5,767,119 more than the previous year.
Governmental activities increased $5,379,492 and business-type activities increased $387,627.
The change in components of governmental activity net position reflects the City’s continued investment
in street infrastructure in the current year. Capital contributions from developers also increased the net
investment in capital assets of governmental activities. The increase in business-type activities net
position reflects the Enterprise Fund activity previously discussed.
At the end of the current fiscal year, the City is able to present positive balances in all categories of net
position, both for the government as a whole, as well as for its separate governmental and business-type
activities. The same situation held true for the prior fiscal year.
-18-
STATEMENT OF ACTIVITIES
The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other
transactions that increase or reduce total net positions. These amounts represent the full cost of providing
services. The Statement of Activities provides a more comprehensive measure than just the amount of
cash that changed hands, as reflected in the fund-based financial statements. This statement includes the
cost of supplies used, depreciation of long-lived capital assets, and other accrual-based expenses.
The following table presents the change in the net position of the City for the years ended December 31,
2017 and 2016:
2016
Program
Expenses Revenues Net Change Net Change
Net (expense) revenue
Governmental activities
General government 3,859,090$ 3,287,782$ (571,308)$ (1,277,217)$
Public safety 5,170,637 507,905 (4,662,732) (4,927,872)
Public works 5,822,738 3,681,013 (2,141,725) (1,498,613)
Culture, education, and recreation 2,042,299 781,171 (1,261,128) (1,564,086)
Conservation and economic development 4,315 58,629 54,314 27,032
Interest and fiscal changes 308,567 – (308,567) (476,121)
Business-type activities
Water 2,175,626 3,342,138 1,166,512 1,683,334
Sewer 2,837,550 2,330,885 (506,665) 407,264
Storm water 1,275,073 1,904,647 629,574 1,148,193
Arena 484,903 441,059 (43,844) (80,865)
23,980,798$ 16,335,229$ (7,645,569) (6,558,951)
General revenues
Taxes 12,684,370 12,206,665
Unrestricted investment earnings 557,024 327,160
Other 171,294 103,394
13,412,688 12,637,219
5,767,119 6,078,268
Net position – beginning 210,618,035 204,539,767
Net position – ending 216,385,154$ 210,618,035$
2017
Total net (expense) revenue
Total general revenues
Change in net position
One of the goals of this statement is to provide a side-by-side comparison to illustrate the difference in the
way the City’s governmental and business-type operations are financed. The table clearly illustrates the
dependence of the City’s governmental operations on general revenues, such as property taxes and
unrestricted investment earnings. In contrast, the City’s business-type activities tend to rely more heavily
on program revenues like charges for services (sales) and program-specific grants to cover expenses. This
is critical given the current downward pressures on the general revenue sources.
The change in net (expense) revenue, presented in the table above, when compared to the prior year is
primarily due to the amount of developer contributions recognized from year-to-year. These contributions
fluctuate with the size and number of completed development projects.
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LEGISLATIVE UPDATES
The 2017 legislative session began with a full agenda, which included adopting a fiscal year 2018–2019
biennial state budget. The February 2017, state budget forecast projected that the state General Fund
would end the 2016–2017 biennium with a surplus of $743 million, eliminating the need for budget cuts
or transfers to balance the fund. However, the Legislature was expected to address several significant
spending areas for which successful funding appropriations had not been passed in recent legislative
sessions. The 2017 regular legislative session ended with four omnibus budget bills being vetoed,
potentially leaving a number of these same areas without appropriations. After a three-day special session,
the Governor and Legislature were able to agree on budget and appropriation bills addressing most of the
state budgetary needs for the upcoming biennium, albeit not without se veral line item vetoes invoked by
the Governor, including striking the appropriations for operating the House and Senate from the bills.
The following is a summary of recent legislation affecting Minnesota cities:
Omnibus Bonding Bill – The omnibus bonding bill authorizes financing for approximately $1.1 billion
in capital improvements. Included in the approved funding was $255 million for transportation
infrastructure, $83 million for economic development, $116 million for Public Financing Agency water
infrastructure loans and grants to municipalities, and $4 million for Metropolitan Council inflow and
infiltration improvement grants to metro area cities.
Omnibus Transportation Bill – The omnibus transportation bill appropriates $2.95 billion in fiscal 2018
and $2.87 billion in fiscal 2019, for a wide variety of transportation related projects. Included in the
appropriations are approximately $191 million and $198 million for municipal state aid street fund
purposes in fiscal 2018 and fiscal 2019, respectively.
Property Tax Relief – The omnibus tax bill contained a number of property tax relief measures,
including:
• Elimination of the implicit price deflator annual increase for the state general property tax
levy, effectively freezing it at the payable 2018 level for many property classes;
• Exempting the first $100,000 of each commercial-industrial parcel’s tax capacity from the
state general property tax levy;
• Expanding eligibility for homestead or agricultural property classification exemptions for
certain types of resort and conservation property for general property taxes; and
• Increasing the minimum value for a storage shed, deck, or similar structure on a leased
mobile home to be considered taxable from $1,000 to $10,000.
Local Government Aid – The annual appropriation for Local Government Aid (LGA) for cities was
increased $15.0 million to $534.4 million for aid payable in 2018 and thereafter, and the LGA payment
schedule was accelerated for fiscal 2019 only. Several corrections were also made to the city LGA
formula calculation, and a sparsity adjustment was incorporated for certain medium and small cities
beginning in 2018.
Minnesota Investment Fund – The omnibus jobs and economic growth bill appropriates $12.5 million
for each year of the biennium for the Minnesota Investment Fund, which is available for municipalities to
provide loans to assist with the expansion of local businesses.
Electronic Funds Transfers – Effective August 1, 2017, home rule charter cities of the second, third, or
fourth class are added to the list of local government entities allowed to pay certain claims using
electronic funds transfers. To be eligible, local governments must enact specified policy controls
governing the initiation, authorization, and documentation of electronic funds transfers.
Claims Declaration – The requirement to obtain a specific form of written claim declaration was also
repealed based on the understanding that by making the claim, the party making the claim is declaring
that the claim is just and correct and has not been paid previously.
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City E-mail Address Required to Receive State Aid – Effective for state aids payable in 2018 and
thereafter, cities will be required to register an official e-mail address with the Commissioner of the state
Department of Revenue in order to receive state aid payments.
Workforce Housing Tax Increment Financing – The omnibus tax bill created a new authorized use of
tax increment financing (TIF), for workforce housing in cities located outside of the statutorily d efined
metropolitan area that meet certain criteria.
Tax Increment Financing Interfund Loans – Interfund loan provisions for TIF were amended to make
it easier for cities and development authorities to make and document interfund loans. Loans may now be
made or documented up to 60 days after the actual transfer or expenditure occurs. Interfund loan
resolutions may now be passed prior to the final approval of the related TIF plan. Loan terms may be
amended after the loan has been made if the TIF district has not been decertified.
Public Debt – The Legislature passed several amendments to statutes governing public debt that took
effect on July 1, 2017, including:
• Allowing both home rule charter and statutory cities to issue 20-year capital notes for projects
to eliminate R-22 Freon-based refrigerant;
• Increasing the maximum dollar limit on Housing and Redevelopment Authority general
obligation bond issues from $3 million to $5 million; and
• Modifying the requirements for street reconstruction bonds to be approved by a two-thirds
majority of the governing body rather than requiring unanimous approval.
Local Housing Trust Funds – The omnibus jobs and economic growth appropriations bill established
authority for cities to create a local housing trust fund by ordinance, or to participate in a joint powers
agreement to establish a regional housing trust fund. The funds, which may be financed from sources such
as local government appropriations or housing and redevelopment authority levies, may be used for grants
or loans for development, rehabilitation, financing of housing to match federal or state or private funds for
housing, down payment assistance, rental assistance, or homebuyer counseling.
Long-Term Equity Investment Authority – Effective July 1, 2017, cities with a population of more
than 100,000 or those that had their most recently issued general obligation bonds rated in the highest
category, are authorized to invest in an expanded list of authorized investments that includes certain
equity-based investments. The amount invested in equity-based investments cannot exceed 15 percent of
the sum of a city’s assigned cash, cash equivalents, deposits, and investments. Before investing in the
expanded list of authorized investments, the governing body of the municipality must adopt a resolution
acknowledging the risks assumed.
Border-to-Border Broadband Grants – The Legislature appropriated $20 million in fiscal 2018 for the
Border-to-Border Broadband Grant Program. The grants, available through the Office of Broadband
Development in the Department of Employment and Economic Development, provide funding to help
communities meet state goals for the development of state-wide, high-speed broadband access, focusing
on areas currently considered to be underserved or with a high concentration of low-income households.
Elections – An omnibus elections law was passed making several modifications to election
administration, including: requiring special elections conducted by local governments be held on one of
five uniform election dates, clarifying the timeline for municipalities to change from odd to
even-year election cycles or vise-versa, allowing municipalities to canvass the results of a primary
election on the second or third day after the primary, and appropriating $7 million for grants to replace
aging election equipment or purchase electronic poll books.
-21-
Workers’ Compensation and PERA Retirement Benefits – A statutory change was adopted based on
the results of recent court rulings that Public Employees Retirement Association (PERA) retirement
benefits should not be offset against workers’ compensation permanent total disability benefits. Under the
new law, claimants would receive all past and future permanent and total disability benef its without a
PERA retirement offset.
Notice of Proposed Ordinances – A new statute was created requiring cities to provide a 10-day notice
prior to a scheduled final vote on most new proposed ordinances or amendments to ordinances, and
specifying the various acceptable means of providing the required notification.
State Building Code Applicability – Construction, additions, and alterations to places of public
accommodation; defined as publicly or privately-owned facilities designed for occupancy by 200 or more
people as a sports or entertainment arena, stadium, theater, community or convention hall, special event
center, indoor amusement facility or water park, or indoor swimming pool; must comply with the state
building code.
Sunday Liquor Sales – Minnesota Statutes were amended to allow for the sale of intoxicating liquor on
Sundays between the hours of 11:00 a.m. and 6:00 p.m. by off-sale licensees, effective July 1, 2017.
REAL ID Act – Minnesota Statutes were amended to make the state compliant with federal REAL ID
Act requirements, which will change identity verification and security related to state-issued identification
cards and driver’s licenses.
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ACCOUNTING AND AUDITING UPDATES
GASB STATEMENT NO. 75, ACCOUNTING AND FINANCIAL REPORTING FOR POSTEMPLOYMENT
BENEFITS OTHER THAN PENSIONS
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than
Pensions, establishes new accounting and financial reporting requirements for governments whose
employees are provided with other post-employment benefits (OPEB), as well as for certain nonemployer
governments that have a legal obligation to provide financial support for OPEB provided to the
employees of other entities. This statement replaces the requirements of GASB Statement Nos. 45 and 57.
This statement establishes standards for recognizing and measuring liabilities, deferred outflows of
resources, deferred inflows of resources, and expense/expenditures. Similar to changes implemented for
pensions, this statement requires the liability of employer and nonemployer contributing entities to
employees for defined benefit OPEB (net OPEB liability) to be measured as the portion of the present
value of projected benefit payments to be provided to current active and inactive employees that is
attributed to those employees’ past periods of service (total OPEB liability), less the amount of the OPEB
plan’s fiduciary net position. Note disclosure and RSI requirements about defined benefit OPEB also are
addressed.
The requirements for this statement are effective for fiscal years beginning after June 15, 2017. Earlier
application is encouraged.
GASB STATEMENT NO. 83, CERTAIN ASSET RETIREMENT OBLIGATIONS
This statement addresses accounting and financial reporting for certain asset retirement obligations
(ARO), which are legally enforceable liabilities associated with the retirement of a tangible capital asset.
This statement establishes criteria for determining the timing and pattern of recognition of a liability and a
corresponding deferred outflow of resources for ARO. A government that has legal obligations to perform
future asset retirement activities related to its tangible capital assets should recognize a liability when it is
both incurred and reasonably estimable. The measurement of an ARO is required to be based on the best
estimate of the current value of outlays expected to be incurred, and a deferred outflow of resources
associated with an ARO is required to be measured at the amount of the corresponding liability upon
initial measurement.
This statement requires the current value of a government’s AROs to be adjusted for the effects of general
inflation or deflation at least annually, and a government to evaluate all relevant factors at le ast annually
to determine whether the effects of one or more of the factors are expected to significantly change the
estimated asset retirement outlays. A government should remeasure an ARO only when the result of the
evaluation indicates there is a significant change in the estimated outlays. Deferred outflows of resources
should be reduced and recognized as outflows of resources in a systematic and rational manner over the
estimated useful life of the tangible capital asset.
If a government owns a minority interest in a jointly owned tangible asset where a nongovernmental
entity is the majority owner or has operational responsibility for the jointly owned asset, the government’s
minority share of an ARO should be reported using the measurement produced by the nongovernmental
majority owner or the nongovernmental minority owner that has operational responsibility, without
adjustment to conform to the liability measurement and recognition requirements of this statement.
-23-
The statement also requires disclosures of any funding or financial assurance requirements a government
has related to the performance of asset retirement activities, along with any assets restricted for the
payment of the government’s AROs. This statement also requires disclosure of information about the
nature of a government’s AROs, the methods and assumptions used for the estimates of the liabilities, and
the estimated remaining useful life of the associated tangible capital assets. If an ARO (or portions
thereof) has been incurred by a government but is not yet recognized because it is not reasonably
estimable, the government is required to disclose that fact and the reasons therefor. This statement
requires similar disclosures for a government’s minority shares of AROs.
The requirements of this statement are effective for reporting periods beginning after June 15, 2018.
Earlier application is encouraged.
GASB STATEMENT NO. 84, FIDUCIARY ACTIVITIES
This statement establishes criteria for identifying fiduciary activities of all state and local governments.
The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary
activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included
to identify fiduciary component units and post-employment benefit arrangements that are fiduciary
activities.
An activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements,
which should present a statement of fiduciary net position and a statement of changes in fiduciary net
position. This statement describes four fiduciary funds that should be reported, if applicable: (1) pension
(and other employee benefit) trust funds, (2) investment trust funds, (3) private -purpose trust funds, and
(4) custodial funds. Custodial funds generally should report fiduciary activities that are not held in a trust
or equivalent arrangement that meets specific criteria.
A fiduciary component unit, when reported in the fiduciary fund financial statements of a primary
government, should combine its information with its component units that are fiduciary component units
and aggregate that combined information with the primary government’s fiduciary funds.
This statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an
event has occurred that compels the government to disburse fiduciary resources, defined as when a
demand for the resources has been made or when no further action, approval, or c ondition is required to
be taken or met by the beneficiary to release the assets.
The requirements of this statement are effective for reporting periods beginning after December 15, 2018.
Earlier application is encouraged.
GASB STATEMENT NO. 85, OMNIBUS 2017
The objective of this statement is to address issues that have been identified during implementation and
application of certain GASB statements. The statement addresses a variety of topics, including issues
related to blending component units, goodwill, fair value measurement and application, and
post-employment benefits (pensions and OPEB). The statement is meant to enhance consistency in the
application of recent accounting and financial reporting standards. The requirements of this statement are
effective for reporting periods beginning after June 15, 2017.
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GASB STATEMENT NO. 86, CERTAIN DEBT EXTINGUISHMENT ISSUES
Current GASB guidance requires that debt be considered defeased in substance when the debtor
irrevocably places cash or other monetary assets acquired with refunding debt proceeds in a trust to be
used solely for satisfying scheduled payments of both principal and interest of the defeased debt. This
new standard establishes essentially the same requirements for when a government places cash and other
monetary assets acquired with only existing resources in an irrevocable trust to extinguish the debt.
The primary objective of this statement is to improve consistency in accounting and financial reporting
for in-substance defeasance of debt by providing guidance for transactions in which cash and other
monetary assets acquired with only existing resources—resources other than the proceeds of refunding
debt—are placed in an irrevocable trust for the sole purpose of extinguish ing debt. This statement also
improves accounting and financial reporting for prepaid insurance on debt that is extinguished and notes
to financial statements for debt that is defeased in substance. The requirements of this statement are
effective for reporting periods beginning after June 15, 2017.
GASB STATEMENT NO. 87, LEASES
A lease is a contract that transfers control of the right to use another entity’s nonfinancial asset as
specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of
nonfinancial assets include buildings, land, vehicles, and equipment. Any contract that meets this
definition should be accounted for under the leases guidance, unless specifically excluded in this
statement.
Governments enter into leases for many types of assets. Under the previous guidance, leases were
classified as either capital or operating depending on whether the lease met any of four tests. In many
cases, the previous guidance resulted in reporting lease transactions differently than similar nonlease
financing transactions.
The goal of this statement is to better meet the information needs of users by improving accounting and
financial reporting for leases by governments. It establishes a single model for leas e accounting based on
the principle that leases are financings of the right to use an underlying asset. This statement increases the
usefulness of financial statements by requiring recognition of certain lease assets and liabilities for leases
that previously were classified as operating leases and recognized as inflows of resources or outflows of
resources based on the payment provisions of the contract.
Under this statement, a lessee is required to recognize a lease liability and an intangible right -to-use lease
asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby
enhancing the relevance and consistency of information about governments’ leasing activities.
To reduce the cost of implementation, this statement includes an exception for short-term leases, defined
as a lease that, at the commencement of the lease term, has a maximum possible term under the lease
contract of 12 months (or less), including any options to extend, regardless of their probabil ity of being
exercised. Lessees and lessors should recognize short-term lease payments as outflows of resources or
inflows of resources, respectively, based on the payment provisions of the lease contract. The
requirements of this statement are effective for reporting periods beginning after December 15, 2019.
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CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
Special Purpose Audit Reports
Year Ended
December 31, 2017
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Page
Independent Auditor’s Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards 1–2
Independent Auditor’s Report on Minnesota Legal Compliance 3
Schedule of Findings and Responses 4–5
Table of Contents
CITY OF ROSEMOUNT
Special Purpose Audit Reports
Year Ended December 31, 2017
DAKOTA COUNTY, MINNESOTA
THIS PAGE INTENTIONALLY LEFT BLANK
C ERTIFIED
A CCOUNTANTS
P UBLIC
PRINCIPALS
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA/CMA
Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com
-1-
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the City Council and Management
City of Rosemount, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the 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 (the City) as of and for the year ended December 31, 2017, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated May 7, 2018.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropri ate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies and, therefore, material weaknesses or significant deficiencies may
exist that were not identified. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. We did identify one deficiency
in internal control, described in the accompanying Schedule of Findings and Responses as item 2017-001,
that we consider to be a significant deficiency.
(continued)
-2-
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
CITY’S RESPONSE TO THE FINDING
The City’s response to the finding identified in our audit is described in the accompanying Schedule of
Findings and Responses. The City’s response was not subjected to the auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on it.
PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this report is not suitable for any other purpose.
Minneapolis, Minnesota
May 7, 2018
C ERTIFIED
A CCOUNTANTS
P UBLIC
PRINCIPALS
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA/CMA
Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com
-3-
INDEPENDENT AUDITOR’S REPORT
ON MINNESOTA LEGAL COMPLIANCE
To the City Council and Management
City of Rosemount, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the 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 (the City) as of and for the year ended December 31, 2017, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated May 7, 2018.
MINNESOTA LEGAL COMPLIANCE
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to
Minnesota Statutes § 6.65, contains seven categories of compliance to be tested: contracting and bidding,
deposits and investments, conflicts of interest, public indebtedness, claims and disbursements,
miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the City failed to
comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities, except as
described in the Schedule of Findings and Responses as item 2017-002. However, our audit was not
directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed
additional procedures, other matters may have come to our attention regarding the City’s noncompliance
with the above referenced provisions.
CITY’S RESPONSE TO THE FINDING
The City’s response to the finding identified in our audit is described in the accompanying Schedule of
Findings and Responses. The City’s response was not subjected to the auditing procedures applied in the
audit of the financial statements and, accordingly, we express no opinion on it.
PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of compliance and the results of
that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any
other purpose.
Minneapolis, Minnesota
May 7, 2018
CITY OF ROSEMOUNT
Schedule of Findings and Responses
Year Ended December 31, 2017
-4-
A. FINDINGS – SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER FINANCIAL
REPORTING
2017-001 INADEQUATE SEGREGATION OF DUTIES
Criteria – Internal control over financial reporting.
Condition – The City of Rosemount, Minnesota (the City) has limited segregation of duties
in a number of areas.
Context – This is a current year and prior year finding.
Cause – The limited segregation of duties is primarily caused by the limited size of the City’s
business office staff.
Effect – One important element of internal accounting controls is an adequate segregation of
duties such that no one individual has responsibility to execute a transaction, have physical
access to the related assets, and have responsibility or authority to record the transaction. A
lack of segregation of duties subjects the City to a higher risk that errors or fraud could occur
and not be detected in a timely manner in the normal course of business.
Recommendation – We recommend that the City continue to review its accounting
procedures and internal controls and make improvements on an ongoing basis within the
limits of the staff available.
Management Response – There is no disagreement with the audit finding. The City reviews
and makes improvements to its internal control structure on an ongoing basis and attempts to
maximize the segregation of duties in all areas within the limits of the staff available.
However, the City does not consider it cost beneficial at this time to increase the size of its
staff in order to further segregate accounting functions.
CITY OF ROSEMOUNT
Schedule of Findings and Responses (continued)
Year Ended December 31, 2017
-5-
B. FINDINGS – MINNESOTA LEGAL COMPLIANCE AUDIT
2017-002 WITHHOLDING AFFIDAVIT
Criteria – Minnesota Statutes § 270C.66.
Condition – Before making final settlement with any contractor under a contract requiring
the employment of employees for wages by said contractor or subcontractors, the City must
obtain a certificate by the Commissioner of Revenue that the contractor or subcontractor has
complied with the withholding requirements of Minnesota Statutes § 290.92 (either
Form IC-134 or a Contractor’s Withholding Affidavit). The City did not obtain the required
certificate for one contract completed in 2017 prior to final settlement being paid.
Context – One of one contract tested was not in compliance. This is a current year finding.
Cause – This was an oversight by city personnel.
Effect – The City did not obtain the required documentation of either a Withholding
Affidavit or Commissioner of Revenue Form IC-134.
Recommendation – We recommend that the City review purchasing procedures and obtain
the required documentation prior to making final payment on all future contracts.
Management Response – There is no disagreement with the audit finding. The City will
review its procedures in place to ensure future compliance with the statute.
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C ERTIFIED
A CCOUNTANTS
P UBLIC
PRINCIPALS
Thomas A. Karnowski, CPA
Paul A. Radosevich, CPA
William J. Lauer, CPA
James H. Eichten, CPA
Aaron J. Nielsen, CPA
Victoria L. Holinka, CPA/CMA
Malloy, Montague, Karnowski, Radosevich & Co., P.A.
5353 Wayzata Boulevard • Suite 410 • Minneapolis, MN 55416 • Phone: 952-545-0424 • Fax: 952-545-0569 • www.mmkr.com
xii
INDEPENDENT AUDITOR’S REPORT
To the City Council and Management
City of Rosemount, Minnesota
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Rosemount,
Minnesota (the City) as of and for the year ended December 31, 2017, and the related notes to the
financial statements, which collectively comprise the City’s basic financial statements as listed in the
table of contents.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our audit . We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts an d disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error .
In making those risk assessments, the auditor considers internal control relevant to the City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
(continued)
xiii
OPINIONS
In our opinion, the financial statements referred to on the previous page 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 as of December 31, 2017, and the
respective changes in financial position, and, where applicable, cash flows thereof, for the year then
ended, in accordance with accounting principles generally accepted in the United States of America.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and the required supplementary information (RSI), as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the RSI in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, supplementary information, and
statistical section, as listed in the table of contents, are presented for purposes of additional analysis and
are not required parts of the basic financial statements.
The supplementary information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
(continued)
xiv
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated May 7, 2018 on
our consideration of the City’s internal control over financial reporting and on our tests of its compliance
with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose
of that report is solely to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s
internal control over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City’s internal control
over financial reporting and compliance.
Minneapolis, Minnesota
May 7, 2018
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