HomeMy WebLinkAbout3.b. Presentation and Acceptance of 2019 Comprehensive Annual Financial Report (CAFR)
EXECUTIVE SUMMARY
City Council Meeting Date: June 2, 2020
AGENDA ITEM: Presentation and Acceptance of 2019
Comprehensive Annual Financial Report
(CAFR)
AGENDA SECTION:
Presentations
PREPARED BY: Jeff May, Finance Director AGENDA NO. 3.b.
ATTACHMENTS: Resolution, PowerPoint Presentation,
CAFR, Management Report, Special
Purpose Audit Reports
APPROVED BY: LJM
RECOMMENDED ACTION: Motion to adopt a Resolution Accepting the 2019
Comprehensive Annual Financial Report.
BACKGROUND
A representative from our audit firm, Malloy, Montague, Karnowski, Radosevich, & Co., P.A. (MMKR),
will be here on June 2nd, to review the City of Rosemount’s Audited 2019 Comprehensive Annual
Financial Report (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
RECOMMENDATION
Staff recommends the above motion to accept the 2019 CAFR.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2020 - 67
A RESOLUTION ACCEPTING THE 2019 COMPREHENSIVE ANNUAL
FINANCIAL REPORT
WHEREAS, the City of Rosemount has been presented its 2019 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 2019 Comprehensive Annual Financial Report, audited by our
audit firm of Malloy, Montague, Karnowski, Radosevich, & Co., P.A.
ADOPTED this 2nd day of June, 2020.
_____________________________
William H. Droste, Mayor
ATTEST:
__________________________
Erin Fasbender, City Clerk
CITY OF ROSEMOUNT
AUDIT REPORT
YEAR ENDED DECEMBER 31, 2019
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
Collateral –Missing “A” rating or better.
Missing withholding affidavit.
Missing quote/quote documentation
AUDIT OPINIONS AND FINDINGS
GOVERNMENTAL FUNDS
Increase
2019 2018 (Decrease)
Fund balances of governmental funds
Total by classification
Nonspendable 529$ 34,032$ (33,503)$
Restricted 4,921,523 5,375,931 (454,408)
Committed 517,102 223,619 293,483
Assigned 16,522,782 13,758,394 2,764,388
Unassigned 7,893,190 7,503,588 389,602
Total governmental funds 29,855,126$ 26,895,564$ 2,959,562$
Total by fund
General 10,559,040$ 9,995,409$ 563,631$
Debt Service 2,449,174 3,209,605 (760,431)
Capital Projects 13,856,932 11,300,057 2,556,875
Port Authority TIF 2,395,413 2,119,361 276,052
Nonmajor funds 594,567 271,132 323,435
Total governmental funds 29,855,126$ 26,895,564$ 2,959,562$
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
2019 2018 (Decrease)
Net position of enterprise funds
Total by classification
Net investment in capital assets 98,007,299$ 97,977,645$ 29,654$
Unrestricted 28,881,892 26,994,489 1,887,403
Total enterprise funds 126,889,191$ 124,972,134$ 1,917,057$
Total by fund
Water 45,371,778$ 44,697,610$ 674,168$
Sewer 34,806,570 34,724,406 82,164
Storm Water 44,988,963 43,852,046 1,136,917
Arena 1,721,880 1,698,072 23,808
Total enterprise funds 126,889,191$ 124,972,134$ 1,917,057$
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
2019 2018 (Decrease)
Net position
Governmental activities
Net investment in capital assets 85,993,734$ 80,094,490$ 5,899,244$
Restricted 6,255,555 8,108,470 (1,852,915)
Unrestricted 18,205,045 14,596,678 3,608,367
Total governmental activities 110,454,334 102,799,638 7,654,696
Business-type activities
Net investment in capital assets 98,007,299 97,977,645 29,654
Unrestricted 28,881,892 26,994,489 1,887,403
Total business-type activities 126,889,191 124,972,134 1,917,057
Total net position 237,343,525$ 227,771,772$ 9,571,753$
As of December 31,
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2019
CITY OF ROSEMOUNT, MINNESOTA
CITY OF ROSEMOUNT, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2019
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, 2019
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal 1 - 8
GFOA Certificate of Achievement 9
Organizational Chart 10
City Officials 11
FINANCIAL SECTION
Independent Auditors' Report 12 - 14
Management’s Discussion and Analysis 15 - 24
Basic Financial Statements:
Government-wide Financial Statements:
Statement of Net Position 25
Statement of Activities 26
Fund Financial Statements:
Balance Sheet – Governmental Funds 27
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 28
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement
of Activities 29
Statement of Net Position – Proprietary Funds 30
Statement of Revenues, Expenses, and Changes in Net Position -
Proprietary Funds 31
Statement of Cash Flows – Proprietary Funds 32 - 33
Notes to Financial Statements 34 - 76
Required Supplementary Information:
Schedule of Revenues and Other Sources Compared to Budget (Budgetary Basis) –
Budget and Actual – General Fund 77
Schedule of Expenditures and Other Uses (Budgetary Basis) – Budget and
Actual – General Fund 78
Schedule of City’s and Nonemployer Proportionate Share of the Net Pension Liability –
Public Employees General Employees Retirement Fund 79
Schedule of Employer Contributions – Public Employees General Employees Retirement Fund 79
Schedule of City’s Proportionate Share of the Net Pension Liability –
Public Employees Police and Fire Fund 80
Schedule of Employer Contributions – Public Employees Police and Fire Fund 80
Schedule of Changes in the Rosemount Fire Department Relief Association’s Net Pension
Asset and Related Ratios 81
Schedule of Employer Contributions – Rosemount Fire Department Relief Association 82
Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 83
Notes to Required Supplementary Information 84 - 89
Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet – Nonmajor Governmental Funds 90
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances – Nonmajor Governmental Funds 91
Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis) –
Budget and Actual:
Building CIP Capital Project Sub-Fund 92
Street CIP Capital Project Sub-Fund 93
Equipment CIP Capital Project Sub-Fund 94
CITY OF ROSEMOUNT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
As of and for the Year Ended December 31, 2019
TABLE OF CONTENTS
Page
STATISTICAL SECTION (Unaudited)
Net Position by Component 95
Changes in Net Position 96 – 97
Fund Balances, Governmental Funds 98
Changes in Fund Balances, Governmental Funds 99
Assessed Value (or Tax Capacity) and Estimated Market Value of
All Taxable Property 100
Property Tax Rates – All Direct and Overlapping Governmental Units 101
Principal Property Tax Payers 102
Property Tax Levies and Collections 103
Ratios of Outstanding Debt by Type 104
Ratios of Net General Bonded Debt Outstanding 105
Direct and Overlapping Governmental Activities Debt 106
Legal Debt Margin Information 107
Pledged-Revenue Coverage 108
Demographic and Economic Statistics 109
Principal Employers 110
Full-Time/Permanent Part-Time City Government Employees by
Function/Program 111
Operating Indicators by Function/Program 112
Capital Asset Statistics by Function/Program 113
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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
Population
Increase
Percent
Increase
2019 Staff Estimate 25,460 3,586 16%
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 115 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 1st 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 30th. 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.
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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 77-78 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, while growing, continues to have ample land inventory for all development.
The City has experienced significant residential development over the last several years such that most
new development is now centrally located in the community. That means much of the western portion of
the City is fully developed with available lands in the south and east. The University of Minnesota (UMore)
controls 3,000 acres in the south-central portion of the City and the City continues to work with the land
owner on potential development concepts. The City, in partnership with Xcel Energy and the University of
Minnesota, have been responding to RFI’s for approximately 300 acres just east of Dakota County
Technical College and have garnered some interest from potential users. OPUS Corporation continues to
market the adjoining 160 acres they have reserved for future Business Park use. While no formal
approval has come forward, the sites have received significant interest as compared to previous years.
This is most likely due to the economy, the lack of industrial land closer to the center cities, and the site
sizes allow for large users.
Rosemount has experienced more growth and inquiries about new development. Communities to the
west and northwest have less land available, meaning that residential expansion will continue to move
toward Rosemount where land is available. Likewise, more retail and services have started to move into
the community and more businesses are looking for land within the community. Currently most residents
commute for their jobs and are potential workers for new companies coming into town.
Labor market data is very impressive for the State, Minneapolis/St. Paul metropolitan area and Dakota
County, in which Rosemount is located. 2019 labor force numbers were 3,123,709; 2,024,153; and
242,855, respectively, with unemployment rates of 3.5%; 3.0% and 2.9% 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 recently approved
2040 Comprehensive Plan. That Plan is generally consistent with the goals and objectives of the previous
2030 Plan with the exception that additional land has been brought into the Metropolitan Urban Service
Area (MUSA) to permit further residential development within the community. The City’s population
projection for 2020 is 25,900; 2030 is 31,700; and 2040 is 38,000. The current population is estimated at
25,460.
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Other factors - Development within the community continues on a steady path, slightly increasing year
over year. In 2019 there were 274 new residential units built in the community, 20 units more than 2018
and well over 100 new units as compared to the 2010-2017 time period. The mix of residential units also
illustrates a shift from purely single-family residential units. There were 81 apartment units, 18 townhome
units and 175 more traditional single-family units. This type of housing has always been the primary units
constructed so a shift to more attached units is consistent with the goals of the current council and a
welcome change. The City Council is interested in providing life cycle housing for existing and future
residents and desires the provision of additional attached housing as well as more rental opportunities
within the City. Developers have platted numerous lots making them available for construction in 2020. By
January 1, 2020, there were approximately 440 lots ready for permit within the community.
In 2019, the City’s construction valuation was also greater than 2018 by approximately $3,000,000. The
slight construction valuation increase is attributable to the additional residential units and valuations.
There were several industrial projects in 2019, several expansions at existing facilities such as Frana
Wall, Flint Hills Refinery and Mosaic. New construction occurred for CA Gear and the first spec building
within the Biscayne Business Park. Hope Field House started construction in 2019 and is projected to be
completed in 2020. Other retail improvements included tenant finishes for Park Dental, Jersey Mikes and
other retail tenant spaces in town.
Cartegraph and GIS - In 2019 we continued to implement new features of our Cartegraph Operations
Management System (OMS), taking advantage of its user-friendly, map-based interface to manage all
facets of Public Works operations. A main focus in 2019 was updating water meter information to
determine how many outdated and high-usage meters are in our system. Utilizing this information, we are
in the process of developing a comprehensive multi-year replacement plan, with the intention of replacing
all meters with “smart technology” meters over the next several years.
Another main area of focus in 2019 was to perform pavement inspections on all city segments and update
the information in OMS. Real-time pavement ratings will allow for timely and accurate planning and
budgeting for future construction projects. Our GIS intern assisted with the data entry for these
inspections, as well as with the following projects:
Entering platted easements into GIS
Collecting locations and attributes of new street lights
Entering locations and attributes of new water, sewer and storm infrastructure
Entering locations and attributes of new utility accounts (new customers)
Capital Improvement Projects - The Public Works Department coordinated and / or completed the
following capital improvement projects in 2019:
Exterior painting and furnace / AC replacement at Central Park shelter
New carpet and flooring at Fire Station 2
New carpet and flooring at PW North
Replaced HVAC unit and front lobby glass at City Hall
Interior painting, new protective floor coating, and LED light replacement at PW Wood Shop
Ice rink replacement at Bloomfield Park
Roof maintenance on Camfield Park shelter
Drain tile improvements at Meadows Park
New backstop and wing fencing at Chippendale Park
New playground equipment installed at Schwarz Park and Winds Park
Interior and exterior painting of Chippendale water tower
Roof maintenance at Wells 7 and 12
New HVAC units at Well 14
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Pump recondition at Well 15
Began the process to replace the fuel control pedestal and software (completed in January 2020)
City Construction Projects
2019 Street Improvements – Pavement mill and overlay on Connemara Trail between Diamond
Path and Shannon Parkway. Lane configuration on this section was modified to single lane in
each direction with a center turn lane. The remainder of the 2019 SIP, which includes 2.3 miles of
mill & overlay and 0.8 miles or reclamation, will be completed in 2020.
132nd Street Improvements – Replaced the existing pavement at the east end and converted
approximately 500 feet of roadway from gravel to pavement. This street provides the primary
access to the Dunmore development.
Adalyn Avenue – This road will connect Addison Avenue to the new section of Connemara Trail
east of Akron Avenue. This road will serve existing multi-family homes in the area, as well as
future development to the north of Connemara Trail and east of Akron Avenue.
Dunmore Lift Station – A stormwater lift station was constructed to manage the stormwater in the
Dunmore development as well as the Harmony development on the east side of TH 3.
Connemara Trail (east of Akron) – Design for this project began in 2018, with construction
expected in 2020. This road will eventually extend into the Emerald Isle development currently
being planned to the east of the existing developments.
Bonaire Path East (Akron Avenue to Anderson Drive) – The gravel road was upgraded to an
urban paved section with curb and gutter. This project also extends the railroad quiet zone to
include the crossing on Bonaire Path East.
Biscayne Avenue (Boulder Trail to CSAH 46) – Design for this project was initiated in 2018, with
construction expected in 2020. The gravel road will be upgraded to an urban paved section with
curb and gutter. This project also extends sanitary sewer to service those properties to the south.
Developer Construction Projects
Prestwick Place 17th, 18th, 21st and 22nd Additions – These are the final phases of the
Prestwick development on the east side of Akron Avenue, north of Connemara Trail. These
neighborhoods are multi-family homes by developer Lennar.
Prestwick Place 19th Addition – This is the continuation of single-family homes by Prestwick LLC,
located on the west side of Akron Avenue, north of Connemara Trail.
Minea Sanitary Sewer Extension – Sanitary sewer was extended through the school district
property on the southwest corner of Bonaire Path and Akron Avenue, intended to serve future
development on the parcel to the west.
Bella Vista 6th Addition – This cul-de-sac includes 19 single-family homes by developer Lennar.
Biscayne Business Park – This cul-de-sac is an 8-parcel business park off Biscayne Avenue, just
north of 160th Street. The developer is Stordahl Partnership LLLP (Appro Development).
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
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County Drug Task Forces, South Metro SWAT, Dakota County Domestic Preparedness
Committee, and the Dakota County Electronic Crimes Unit are consolidated services
organizations that contribute to Rosemount’s policing services.
Records Unit – The Police Department’s Records Unit is responsible for the processing of over
2,100 case reports each year. Reports require transcription and compilation for transmittal to the
City or County prosecutor’s office or any other agency (i.e. Social Services, Department of
Human Services, etc.) 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, city
licensing requirements, and data requests among others.
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, regulate traffic control, conduct
preliminary criminal investigations, enforce traffic laws, enforce criminal laws, perform foot/bike
patrol and provide general and specific deterrence to crime. In addition, Patrol Officers respond to
medical calls as trained in First Aid and CPR. 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. Equally important, a significant amount of time is spent developing relationships
within the community and partnering with members of community organizations. Patrol Officers
perform additional specialty assignments as Crime Scene Technicians, Use-of-Force Instructors,
South Metro SWAT Tactical Officers, Drug Recognition Experts, Special Operations Team
operators (SOT), and as various committee members (i.e. Uniform Committee, Recognition
Committee, etc.).
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, Dakota County Social
Services, 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 build relationships with the community to
build trust, share perspectives and create partnerships to serve the community together.
Moreover, the Police Department works to inform residents of crime within the community,
methods/strategies to help prevent crimes and keep open channels of communications to
receiver input/feedback about crime that is occurring. While these objectives are part of each
officer’s daily responsibilities, there are specific programs that are more associated with
community policing; these programs 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 Resource Officer (SRO) – 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
hostile event 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.
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Community Resource Officer (CRO) – In order to work together with the community, the
Police Department must share information concerning criminal activity and crime
prevention with the community. While all officers are available to make presentations to
community groups and organizations on a variety of topics, the Community Resource
Officer focuses on acting as a primary liaison to the community. Several events are also
held throughout the year in an effort to build relationships with the residents and
businesses. These include Night-to-Unite block parties, Neighborhood Watch meetings,
Shop with a Cop, Cops for Kicks, Guns vs. Hoses Hockey Game, Ballin’ in Dakota
County Basketball Tournament, Pink Patch Project, Warrior 196 Run, Public Safety in the
Park, and several events throughout the annual Leprechaun Days events (i.e. Kids
Dance, Police Booth, etc.). Finally, the Rosemount Police Department also utilizes a
Facebook page to inform the community on a variety of issues surrounding the
community and public safety.
Reserve Officer Program – Reserve officers are volunteers who supplement the staff of
sworn officers of the Department to serve the mission. The Reserve Officers are utilized
to handle traffic and crowd control duties at accident scenes, city festivals, community
gatherings or other emergencies. In addition, they work a variety of community events,
patrol in squads, handle calls for service such as motorist assists and animal complaints,
and they often help with prisoner transports.
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.
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. The Rosemount Police Explorer Post was
formed in 2014; the group meets twice a month to 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. The
Explorer Post is an opportunity for youth of our community to become exposed to law
enforcement and enhance our overall community relationship.
Adult Citizen Academy Program – The Adult Citizen Academy has been a project of the
Rosemount Police Department for the past 9 years. In 2019, 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 2019 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 animals and handling any animal-related
issues that arise.
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Mayor & City CouncilCity AdministratorAssistant City AdministratorCity ClerkCommunications CoordinatorHR CoordinatorCommunity Development DirectorInspection Secretaries (2)Planning & Personnel SecretarySenior PlannerPlannerGIS AnalystBuilding Official/Fire MarshallBuilding Inspectors (2)Finance DirectorIT CoordinatorIT SpecialistAccounting SupervisorAccountantPayroll ClerkAccounts Payable ClerkUtility Billing Clerks (2)Parks and Recreation DirectorSecretaryCSRRecreation Supervisors (2)Recreation CoordinatorSeasonal WorkersRental CoordinatorParks SupervisorRecreation Facilities ManagerBuilding AttendantsBuilding Maintenance Workers (3)Director of Public Works/City EngineerPW SupervisorPW Mechanics (2)Crew Leads (3)Public Works CoordinatorAssistant City EngineerPW SecretarySr. EngineeringTechnicianChief of PoliceCommanderSergeants (5)Officers (13)Detectives (2)Community Resource OfficerSchool Resource OfficerDrug Task Force AgentCSOs (2 PT)Reserve OfficersRecords SupervisorSecretaries (2 FT)Fire ChiefFire Prevention / EducationSafety CoordinatorAssistant Fire ChiefTraining CoordinatorCaptainsLieutenantsFirefightersSecretaryCity AttorneyCitizen Advisory CommissionsCity of RosemountOrganizational Chart10
CITY OF ROSEMOUNT
CITY OFFICIALS
As of and for the Year Ended December 31, 2019
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Term of Office Term Expires
ELECTED OFFICIALS:
Mayor Bill Droste Four Years December 31, 2022
Council member Tamara Block Four Years December 31, 2022
Council member Paul Essler Four Years December 31, 2022
Council member Heidi Freske Four Years December 31, 2020
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 Mikael Dahlstrom
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 Baker Tilly Municipal Advisors, LLC
Ehlers & Associates, Inc.
Engineering WSB & Associates
Short, Elliot, Hendrickson, Inc. (SEH)
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. (AE2S)
Emmons & Olivier Resources, Inc.
Evergreen Land Services Company
Braun Intertec Co.
American Engineering Testing, Inc.
Wold Architects and Engineers
THIS PAGE INTENTIONALLY LEFT BLANK
12
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, 2019, 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 and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the 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)
C E R T I F I E D
A C C O U N T A N T S
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
Jaclyn M. Huegel, CPA
Kalen T. Karnowski, CPA
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
Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1
13
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, 201 9, 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)
14
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated April 29, 2020
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
April 29, 2020
15
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, 2019. 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 $237,343,525 (net position). Of
this amount, $47,086,937 (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 $9,571,753. 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 $7,893,190, or 55% percent of
the total General Fund expenditures budgeted for the upcoming year. Comparison of this balance
to prior years’ balances is illustrated on the table on page 21.
> The City's total bonded debt decreased by $1,590,000 (approximately 14%) during the current
year.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial
statements. The City's basic financial statements comprise three components: 1) government-wide
financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report
also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide financial statements
The government-wide financial statements are designed to provide readers with a broad overview of the
City's finances, in a manner similar to a private-sector business.
The statement of net 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 the 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).
16
Both the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenues (governmental activities) from other functions that
are intended to recover all or a significant portion of their costs through user fees and charges (business-
type activities). The governmental activities of the City include general government; public safety; public
works; 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 25-26 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 provided in the form of combining statements
elsewhere in this report.
The City adopts an annual appropriated budget for its general fund. A budgetary comparison 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 27-29 of this report.
17
Proprietary funds
The City maintains two different types of proprietary funds. Enterprise funds are used to report the same
functions presented as business-type activities in the government-wide financial statements. The City
uses enterprise funds to account for its public utilities and ice arena operations. The internal service fund
is an accounting device to accumulate and allocate costs internally among the City's various functions.
The City uses its internal service fund to account for insurance premiums and deductibles and to
accumulate resources for the risk of uninsured loss. Because this service predominantly benefits
governmental rather than business-type functions, it has been included within governmental activities in
the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for each of the
public utilities, which are considered to be major funds of the City, and information on the ice arena fund,
which is considered a non-major fund. The internal service fund is also presented separately in the
proprietary fund financial statements.
The basic proprietary fund financial statements can be found on pages 30-33 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 34-76 of this report.
Other information
Required supplementary information is included on pages 77-89. 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 90-94 of
this report. Lastly, the statistical section is included on pages 95-113.
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 $237,343,525 at the close of the most recent fiscal year.
The largest portion of the City's net position (78 percent) reflects its investment in capital assets (e.g.,
land, buildings, machinery and equipment, infrastructure) less any related debt used to acquire those
assets that is still outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not 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.
18
City’s Statement of Net Position
Governmental
Business-
Type 2019 Governmental
Business-
Type 2018
Activities Activities Totals Activities Activities Totals
Current and other assets $ 36,705,733 $ 30,785,158 $ 67,490,891 $ 34,288,550 $ 28,479,652 $ 62,768,202
Capital assets 95,172,935 99,193,708 194,366,643 90,702,459 99,328,731 190,031,190
Total assets 131,878,668 129,978,866 261,857,534 124,991,009 127,808,383 252,799,392
Deferred outflows of resources 3,027,976 137,656 3,165,632 3,883,646 224,507 4,108,153
Long-term liabilities outstanding 16,310,551 2,473,251 18,783,802 17,542,032 2,593,679 20,135,711
Other liabilities 1,983,226 599,617 2,582,843 2,295,743 251,542 2,547,285
Total liabilities 18,293,777 3,072,868 21,366,645 19,837,775 2,845,221 22,682,996
Deferred inflows of resources 6,158,533 154,463 6,312,996 6,237,242 215,535 6,452,777
Net position:
Net investment in
capital assets 85,993,734 98,007,299 184,001,033 80,094,490 97,977,645 178,072,135
Restricted 6,255,555 - 6,255,555 8,108,470 - 8,108,470
Unrestricted 18,205,045 28,881,892 47,086,937 14,596,678 26,994,489 41,591,167
Total net position $ 110,454,334 $ 126,889,191 $ 237,343,525 $ 102,799,638 $ 124,972,134 $ 227,771,772
An additional portion of the City’s net position ($6,255,555 or 3%) represents resources that are subject to
external restrictions on how they may be used. The remaining balance representing unrestricted net
position ($47,086,937) 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 $7,654,696, accounting for approximately
80% of the total growth in the government’s net position. This compares to an increase (from
governmental activities) of $7,263,855 in 2018. Net transfers to governmental activities from business-
type activities increased $1,796,981 from 2018. Revenues decreased by approximately $480,000 mainly
related to charges for services and capital grants and contributions in 2019. Total expenses increased
from 2018 and the net effect was the increase in net position of $7,654,696.
Business-type activities
Business-type activities increased the City’s net position by $1,917,057 accounting for approximately
20% of the total growth in the government’s net position. This compares to an increase of $4,122,763 in
2018. The primary reason for the change in net position compared to the prior year change was due to
decreases in net transfers to business-type activities from governmental activities and charges for
services. Net transfers from business-type activities to governmental activities were $1,796,981 more
than the prior year. Total expenses increased from 2018 and the net effect was the increase in net
position of $1,917,057.
19
Elements of these changes are as follows:
City’s Changes in Net Position
Governmental
Business-
Type 2019 Governmental
Business-
Type 2018
Activities Activities Totals Activities Activities Totals
Revenues:
Program revenues:
Charges for services $ 5,370,058 $ 7,922,139 $ 13,292,197 $ 5,791,082 $ 8,349,018 $ 14,140,100
Operating grants and contributions 749,242 4,267 753,509 460,756 58,411 519,167
Capital grants and contributions 3,941,424 2,132,156 6,073,580 5,087,725 1,345,372 6,433,097
General revenues:
Property taxes 13,153,531 - 13,153,531 12,728,778 - 12,728,778
Other taxes 411,423 - 411,423 400,551 - 400,551
Interest earnings 547,947 628,194 1,176,141 391,991 438,095 830,086
Change in fair value of investments 119,787 67,467 187,254 (63,299) (33,367) (96,666)
Gain on sale of capital assets 33,783 - 33,783 - - -
Miscellaneous 79,694 - 79,694 89,672 - 89,672
Total revenues 24,406,889 10,754,223 35,161,112 24,887,256 10,157,529 35,044,785
Expenses:
General government 3,826,860 - 3,826,860 3,605,197 - 3,605,197
Public safety 5,332,313 - 5,332,313 5,235,993 - 5,235,993
Public works 5,692,171 - 5,692,171 5,163,908 - 5,163,908
Culture, education and recreation 2,217,403 - 2,217,403 2,119,418 - 2,119,418
Conservation and economic
development 56,611 - 56,611 61,637 - 61,637
Interest and fiscal charges 281,999 - 281,999 295,431 - 295,431
Water - 2,845,741 2,845,741 - 2,156,694 2,156,694
Sewer - 3,053,021 3,053,021 - 3,029,482 3,029,482
Storm water - 1,732,753 1,732,753 - 1,330,580 1,330,580
Arena - 550,487 550,487 - 659,827 659,827
Total expenses 17,407,357 8,182,002 25,589,359 16,481,584 7,176,583 23,658,167
Increase in net position before
transfers 6,999,532 2,572,221 9,571,753 8,405,672 2,980,946 11,386,618
Transfers 655,164 (655,164) - (1,141,817) 1,141,817 -
Increase in net position 7,654,696 1,917,057 9,571,753 7,263,855 4,122,763 11,386,618
Net position – Beginning of Year 102,799,638 124,972,134 227,771,772 95,535,783 120,849,371 216,385,154
Net position – End of Year $ 110,454,334 $ 126,889,191 $ 237,343,525 $ 102,799,638 $ 124,972,134 $ 227,771,772
20
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 $29,855,126, an increase of $2,959,562 in comparison with the prior year. $7,893,190
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 ($529) is classified as nonspendable in regards to prepaid items, $4,921,523 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 Culture, education,
and recreation
Conservation and
economic
development
Interest and fiscal
charges
Millions
Expenses
Revenue
0
0.5
1
1.5
2
2.5
3
3.5
4
Water Sewer Storm water Arena
Millions
Expenses
Revenue
21
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 $7,893,190, while total fund balance reached $10,559,040. The
following table shows year-end General Fund balances as compared to the adopted expenditure and
other financing uses budget of the following year:
Fund Balance
Year Budget Amount Percent of Next Budget
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 7,503,588 55%
2019 13,702,700 7,893,190 55%
2020 14,307,500
During the current fiscal year, unassigned fund balance in the General Fund increased by $389,602. 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 and other financing uses 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, 2019, 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 $760,431 due to a decrease in special assessments. The
capital projects fund balance increased by $2,556,875 due to Municipal State Aid (MSA) contributions
and transfers in compared to actual capital expenditures (mostly related to timing of collections and
expenditures). The Port Authority TIF fund balance increased by $276,052 due to taxes levied being more
than project costs and interest and fiscal charges.
22
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 $28,452,313 while the
arena fund had an unrestricted net position amounting to $429,579. The increase in total net position for
the utility funds was $1,893,249 after $2,379,453 from private entities (i.e. developers) as well as net
transfers out of $1,028,961. The increase in total net position for the arena fund was $23,808, which
included net transfers in of $126,500.
Revenues by Source – Proprietary Funds
Taxes
54.3%
Intergovernmental
12.9%
Public charges for
services
17.8%
Licenses and
permits
3.8%
Fines and
forfeitures
0.4%
Special
assessments
2.6%
Investment income
and miscellaneous
8.2%
Charges for services
65.3%
Water meters
1.1%
Connection fees
21.5%
Intergovernmental
0.0%
Investment and
miscellaneous
income
8.1%
Surcharges and
penalties
4.0%
23
General Fund Budgetary Highlights
There were a few slight variances between final budgeted revenues and actual amounts. License
and permit revenues exceeded budget by approximately $176,000 because of more activity than
expected. Public charges for services exceeded budget by approximately $139,000 due mostly to
higher than expected collections for development related revenues. State aid intergovernmental
revenues exceeded budget by approximately $72,000 mainly due to the collection of several small
grants and a larger than expected payment for Police State Aid. Interest revenues were
approximately $172,000 higher than budgeted because of improving market conditions. 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 right at budget before the adjustment to
meet the 55% fund balance number with most departments being slightly less than budget and a
few being just slightly over budget. The change between the original and final budget included minor
Council approved adjustments primarily for donations.
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, 2019, amounts to $194,366,643 (net of accumulated depreciation). This investment in
capital assets includes land, buildings and structures, machinery and equipment, water, sewer, and storm
water systems, infrastructure and construction in progress.
City of Rosemount’s Capital Assets
(net of depreciation)
Governmental Business-Type
Activities Activities Totals
Land $ 7,886,846 $ 2,893,277 $ 10,780,123
Land improvements (not depreciable) 4,373,815 - 4,373,815
Land improvements (depreciable) 4,584,665 - 4,584,665
Buildings 17,437,170 12,110,980 29,548,150
Machinery and equipment 13,382,737 4,443,454 17,826,191
Infrastructure:
Other 209,037 - 209,037
Roads 63,837,793 - 63,837,793
Bridges 2,034,591 - 2,034,591
Parking lots 1,358,831 - 1,358,831
Mains and lines and other
improvements - 143,945,662 143,945,662
Construction in progress 11,619,341 673,877 12,293,218
Accumulated depreciation (31,551,891) (64,873,542) (96,425,433)
Total capital assets $ 95,172,935 $ 99,193,708 $ 194,366,643
Additional information on the City's capital assets can be found in Note IV.C. on pages 51-52 of this
report.
24
Long-term debt
At the end of the current fiscal year, the City had total bonded debt outstanding of $9,805,000 (including
debt recorded in the Port Authority). Of this amount, $2,535,000 was for general obligation improvement
debt which has financed special assessment construction as part the continuing development within the
City. An additional $5,225,000 was general obligation debt issued by the Port Authority which financed
the City's economic development and redevelopment programs. Another $1,110,000 was general
obligation revenue bond debt issued to add to and improve the water utility system within the City. The
remaining $935,000 was general obligation refunding debt (for Fire Station 2).
The City's total debt decreased by $1,590,000 (approximately 14%) during the current year.
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
$83,461,270. Of the City's $9,805,000 in outstanding general obligation debt at the current fiscal year
end, $935,000 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 2018, and no new bonds
were issued in 2019. This rating amounts 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 54-56 of this
report.
Economic Factors
> Dakota County's unemployment rate ended the year at 2.9 percent, which compares favorably
with the state unemployment rate of 3.5 percent, and the national unemployment rate of
3.4 percent.
> City building permits were up significantly in quantity and in value in 2019, as compared to 2018.
A total of 3,997 permits with a total valuation of $90,278,793 were issued in 2019. Building
permits for 2020 are on track to be at similar levels as 2019.
> In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China.
In the first several months of 2020, the virus, SARS-CoV-2, and resulting disease, COVID-19,
spread to the United States, including to areas impacting the City. The City’s evaluation of the
effects of these events is ongoing; however at the current time there has not been a significant
impact on operations in 2020. The extent of the impact of COVID-19 on the City’s operational and
financial performance will depend on future developments, including the duration and spread of
the outbreak and related governmental or other regulatory actions.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report
or requests for additional information should be addressed to the Finance Director, City of Rosemount,
2875 145th Street West, Rosemount, Minnesota 55068-4997.
Business-
Governmental Type
Activities Activities Totals
ASSETS
Cash and investments 31,764,263$ 29,057,840$ 60,822,103$
Receivables
Taxes 620,151 - 620,151
Delinquent taxes 79,262 - 79,262
Accounts 565,138 1,217,053 1,782,191
Special assessments 1,022,137 280,454 1,302,591
Due from other governmental units 1,031,785 54,483 1,086,268
Prepaid items 308,336 175,328 483,664
Net pension asset 1,314,661 - 1,314,661
Capital assets
Land 7,886,846 2,893,277 10,780,123
Non-depreciable land improvements 4,373,815 - 4,373,815
Construction in progress 11,619,341 673,877 12,293,218
Other capital assets, net of depreciation/amortization 71,292,933 95,626,554 166,919,487
Total Assets 131,878,668 129,978,866 261,857,534
DEFERRED OUTFLOWS OF RESOURCES
Other postemployment benefit related amounts 40,427 5,331 45,758
Pension related amounts 2,987,549 132,325 3,119,874
Total Deferred Outflows 3,027,976 137,656 3,165,632
LIABILITIES
Accounts payable 899,154 548,763 1,447,917
Accrued payroll and payroll taxes 49,895 38,128 88,023
Other accrued liabilities and deposits 1,034,177 12,726 1,046,903
Noncurrent liabilities
Due within one year 1,947,621 250,374 2,197,995
Due in more than one year 8,335,748 1,143,812 9,479,560
Net pension liability 5,294,003 982,344 6,276,347
Other postemployment benefits liability 733,179 96,721 829,900
Total Liabilities 18,293,777 3,072,868 21,366,645
DEFERRED INFLOWS OF RESOURCES
Contributions received for subsequent year 2,099,749 - 2,099,749
Pension related amounts 4,058,784 154,463 4,213,247
Total Deferred Inflows of Resources 6,158,533 154,463 6,312,996
NET POSITION
Net investment in capital assets 85,993,734 98,007,299 184,001,033
Restricted for debt service 4,863,958 - 4,863,958
Restricted for pensions 1,314,661 - 1,314,661
Restricted PEG fees 76,936 - 76,936
Unrestricted 18,205,045 28,881,892 47,086,937
TOTAL NET POSITION 110,454,334$ 126,889,191$ 237,343,525$
CITY OF ROSEMOUNT
STATEMENT OF NET POSITION
As of December 31, 2019
See accompanying notes to financial statements.
25
Program RevenuesOperating CapitalCharges for Grants and Grants and Governmental Business-TypeFunctions/ProgramsExpensesServicesContributionsContributionsActivitiesActivitiesTotalsPrimary Government: Governmental activities: General government 3,826,860$ 3,915,953$ -$ -$ 89,093$ -$ 89,093$ Public safety 5,332,313 149,992 418,138 11,846 (4,752,337) - (4,752,337) Public works 5,692,171 153,036 300,431 3,925,601 (1,313,103) - (1,313,103) Culture, education and recreation 2,217,403 1,151,077 410 2,777 (1,063,139) - (1,063,139) Conservation and economic development 56,611 - 30,263 1,200 (25,148) - (25,148) Interest and fiscal charges 281,999 - - - (281,999) - (281,999) Total Governmental Activities 17,407,357 5,370,058 749,242 3,941,424 (7,346,633) - (7,346,633) Business-Type activities Water2,845,741 3,301,002 720 635,944 - 1,091,925 1,091,925 Sewer3,053,021 2,425,548 712 483,220 - (143,541) (143,541) Storm water 1,732,753 1,757,747 2,521 1,012,992 - 1,040,507 1,040,507 Arena550,487 437,842 314 - - (112,331) (112,331) Total Business-Type Activities 8,182,002 7,922,139 4,267 2,132,156 - 1,876,560 1,876,560 Total Primary Government 25,589,359$ 13,292,197$ 753,509$ 6,073,580$ (7,346,633) 1,876,560 (5,470,073) General revenues: Taxes Property taxes, levied for general purposes 12,005,548 - 12,005,548 Property taxes, levied for debt service 1,147,983 - 1,147,983 Other taxes411,423 - 411,423 Interest earnings 547,947 628,194 1,176,141 Change in fair value of investments 119,787 67,467 187,254 Gain on sale of capital assets 33,783 - 33,783 Miscellaneous 79,694 - 79,694 Transfers 655,164 (655,164) - Total general revenues and transfers 15,001,329 40,497 15,041,826 Change in net position7,654,696 1,917,057 9,571,753 NET POSITION - Beginning102,799,638 124,972,134 227,771,772 NET POSITION - ENDING110,454,334$ 126,889,191$ 237,343,525$ Primary GovernmentChanges in Net PositionNet (Expense) Revenue and CITY OF ROSEMOUNTSTATEMENT OF ACTIVITIESFor the Year Ended December 31, 2019See accompanying notes to financial statements.26
Port Nonmajor Total
Authority Governmental Governmental
General Debt Service Capital Projects TIF Funds Funds
ASSETS
Cash and investments 10,985,167$ 3,359,334$ 14,355,349$ 2,396,839$ 589,269$ 31,685,958$
Receivables from:
Taxes 698,958 - - 455 - 699,413
Accounts 71,667 - 485,875 - 7,596 565,138
Special assessments 16,375 146,608 857,819 - - 1,020,802
Delinquent special assessments - 416 919 - - 1,335
Due from other governmental units 7,504 - 1,024,281 - - 1,031,785
Prepaid items - - - - 529 529
TOTAL ASSETS 11,779,671$ 3,506,358$ 16,724,243$ 2,397,294$ 597,394$ 35,004,960$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities
Accounts payable 362,947$ -$ 530,531$ 1,881$ 2,827$ 898,186$
Accrued payroll and payroll taxes 49,895 - - - - 49,895
Deposits payable 615,794 - 296,488 - - 912,282
Total Liabilities 1,028,636 - 827,019 1,881 2,827 1,860,363
Deferred Inflows of Resources
Unavailable revenue 191,995 141,266 856,461 - - 1,189,722
Contributions received for subsequent year - 915,918 1,183,831 - - 2,099,749
Total Deferred Inflows of Resources 191,995 1,057,184 2,040,292 - - 3,289,471
Fund Balances
Nonspendable - - - - 529 529
Restricted - 2,449,174 - 2,395,413 76,936 4,921,523
Committed - - - - 517,102 517,102
Assigned 2,665,850 - 13,856,932 - - 16,522,782
Unassigned 7,893,190 - - - - 7,893,190
Total Fund Balances 10,559,040 2,449,174 13,856,932 2,395,413 594,567 29,855,126
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 11,779,671$ 3,506,358$ 16,724,243$ 2,397,294$ 597,394$
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. 95,172,935
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. 1,189,722
Internal service funds are reported in the statement of net position as governmental activities. 385,144
The net pension asset does not relate to current financial resources and is not reported in the governmental funds. 1,314,661
The net pension liability does not relate to current financial resources and is not reported in the governmental funds. (5,294,003)
Deferred outflows of resources related to pensions do not relate to current financial resources and is not reported
in the governmental funds.2,987,549
Deferred inflows of resources related to pensions do not relate to current financial resources and is not reported
in the governmental funds.(4,058,784)
The other postemployment benefits liability does not relate to current financial resources and is not reported
in the governmental funds.(733,179)
Deferred outflows of resources related to other postemployment benefits do not relate to current financial resources and is not reported
in the governmental funds.40,427
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.(10,405,264)
NET POSITION OF GOVERNMENTAL ACTIVITIES 110,454,334$
CITY OF ROSEMOUNT
BALANCE SHEET - GOVERNMENTAL FUNDS
As of December 31, 2019
See accompanying notes to financial statements.
27
Port Nonmajor Total
Authority Governmental Governmental
General Debt Service Capital Projects TIF Funds Funds
REVENUES
Taxes 10,428,208$ 282,507$ 1,472,327$ 865,476$ 136,436$ 13,184,954$
Intergovernmental 749,242 - 2,381,069 - - 3,130,311
Public charges for services 1,656,677 - 2,634,657 - 17,725 4,309,059
Licenses and permits 925,938 - - - - 925,938
Fines and forfeitures 109,083 - - - - 109,083
Special assessments 171 161,178 477,854 - - 639,203
Interest earnings 230,720 31,574 252,763 28,205 - 543,262
Change in fair value of investments 92,247 - 33,141 (5,601) - 119,787
Donations/contributions - - 1,589 - - 1,589
Miscellaneous 28,264 - 1,270,050 - 3,916 1,302,230
Total Revenues 14,220,550 475,259 8,523,450 888,080 158,077 24,265,416
EXPENDITURES
Current:
General government 3,090,733 - 7,500 165,116 - 3,263,349
Public safety 4,702,502 - - - - 4,702,502
Public works 3,820,949 - - - 4,317 3,825,266
Culture, education and recreation 1,751,115 - - - 1,878 1,752,993
Conservation and economic development - - - - 96,229 96,229
Capital Outlay - - 7,112,603 - 332 7,112,935
Debt Service:
Principal retirement - 1,175,000 122,033 270,000 - 1,567,033
Interest and fiscal charges - 132,690 14,440 176,912 - 324,042
Total Expenditures 13,365,299 1,307,690 7,256,576 612,028 102,756 22,644,349
Excess (deficiency) of revenues
over expenditures 855,251 (832,431) 1,266,874 276,052 55,321 1,621,067
OTHER FINANCING SOURCES (USES)
Lease issuance - - 166,131 - - 166,131
Sale of capital assets - - 1,789 - 268,114 269,903
Transfers in 7,380 72,000 1,194,204 - - 1,273,584
Transfers out (299,000) - (72,123) - - (371,123)
Total Other Financing Sources (Uses)(291,620) 72,000 1,290,001 - 268,114 1,338,495
Net Change in Fund Balances 563,631 (760,431) 2,556,875 276,052 323,435 2,959,562
FUND BALANCES - Beginning 9,995,409 3,209,605 11,300,057 2,119,361 271,132 26,895,564
FUND BALANCES - ENDING 10,559,040$ 2,449,174$ 13,856,932$ 2,395,413$ 594,567$ 29,855,126$
CITY OF ROSEMOUNT
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
For the Year Ended December 31, 2019
See accompanying notes to financial statements.
28
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, 2019
Net change in fund balances - total governmental funds 2,959,562$
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 7,112,935
Some items reported as capital outlay but not capitalized (306,248)
Capital contributions from external parties 785,785
Depreciation is reported in the government-wide statements (2,638,579)
Utility infrastructure constructed by capital projects funds not reported
as governmental activities (247,297)
In the statement of activities, the gain of ($33,783) on the disposal of
capital assets is reported. In the fund financial statements, proceeds from the sale
of capital assets ($269,903) are reported because the proceeds increase
financial resources (236,120)
Internal service funds are reported in the statement of activities.(65,687)
Receivables not currently available are reported as unavailable revenue in the fund financial
statements but are recognized as revenue when earned in the government-wide
financial statements.(1,059,172)
Issuing debt provides current financial resources to governmental funds, but issuing
debt increases long-term liabilities in the statement of net position. This is the amount of
debt issued during the year.(166,131)
Repayment of debt principal is an expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the statement of net position. This is the amount
of principal payments paid.1,567,033
Governmental funds report the effect of premiums and discounts, and similar
items when debt is first issued, whereas these amounts were amortized in the
statement of activities.27,866
Some expenses in the statement of activities do not require the use of
current financial resources and, therefore, are not reported as expenditures
in the governmental funds. This is the change in the following liabilities.
Compensated absences (81,566)
Accrued interest on debt 14,179
Net pension liability (94,977)
Net other post employment benefits liability (20,744)
Net pension asset (268,474)
Deferred outflows of resources related to pensions (856,567)
Deferred inflows of resources related to pensions 1,228,001
Deferred outflows of resources related to other post employment benefits 897
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 7,654,696$
See accompanying notes to financial statements.
29
Governmental
Activities -
Storm Non-major Internal Service
Water Sewer Water Arena Totals Fund
ASSETS
Current Assets
Cash and investments 11,795,343$ 7,423,290$ 9,265,707$ 573,500$ 29,057,840$ 78,305$
Accounts receivable 427,922 450,333 288,264 50,534 1,217,053 -
Special assessments receivable 120,088 84,040 76,326 - 280,454 -
Due from other governments - - 54,483 - 54,483 -
Prepaid items 18,862 136,003 11,779 8,684 175,328 307,807
Total Current Assets 12,362,215 8,093,666 9,696,559 632,718 30,785,158 386,112
Noncurrent Assets
Property and equipment:
Land 1,008,628 547,158 1,337,491 - 2,893,277 -
Construction in progress 181,450 - 492,427 - 673,877 -
Buildings 7,820,143 401,414 1,489,523 2,399,900 12,110,980 -
Machinery and equipment 2,535,313 808,214 922,579 177,348 4,443,454 -
Mains and lines 24,426,918 21,268,284 31,761,794 - 77,456,996 -
Other improvements 17,026,077 36,927,460 12,535,129 - 66,488,666 -
Less accumulated depreciation (18,217,325) (32,737,112) (12,634,158) (1,284,947) (64,873,542) -
Net Property and Equipment 34,781,204 27,215,418 35,904,785 1,292,301 99,193,708 -
Total Assets 47,143,419 35,309,084 45,601,344 1,925,019 129,978,866 386,112
DEFERRED OUTFLOWS OF RESOURCES
Other postemployment benefit related amounts 1,808 1,797 941 785 5,331 -
Pension related amounts 42,707 42,715 25,476 21,427 132,325 -
Total Deferred Outflows 44,515 44,512 26,417 22,212 137,656 -
LIABILITIES
Current Liabilities
Accounts payable 100,065 61,483 374,745 12,470 548,763 968
Accrued payroll and payroll taxes 31,487 2,337 2,719 1,585 38,128 -
Accrued interest 12,726 - - - 12,726 -
Current portion of long term obligations 182,515 31,764 23,584 12,511 250,374 -
Total Current Liabilities 326,793 95,584 401,048 26,566 849,991 968
Noncurrent Liabilities
Net pension liability 333,851 331,902 171,621 144,970 982,344 -
General obligation debt 1,022,605 - - - 1,022,605 -
Lease obligations 13,163 - - - 13,163 -
Other postemployment benefits liability 32,776 32,582 17,126 14,237 96,721 -
Accrued compensated absences 34,530 34,411 25,550 13,553 108,044 -
Total Noncurrent Liabilities 1,436,925 398,895 214,297 172,760 2,222,877 -
Total Liabilities 1,763,718 494,479 615,345 199,326 3,072,868 968
DEFERRED INFLOWS OF RESOURCES
Pension related amounts 52,438 52,547 23,453 26,025 154,463 -
NET POSITION
Net investment in capital assets 33,594,795 27,215,418 35,904,785 1,292,301 98,007,299 -
Unrestricted 11,776,983 7,591,152 9,084,178 429,579 28,881,892 385,144
TOTAL NET POSITION 45,371,778$ 34,806,570$ 44,988,963$ 1,721,880$ 126,889,191$ 385,144$
CITY OF ROSEMOUNT
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
As of December 31, 2019
Business-Type Activities - Enterprise Funds
See accompanying notes to financial statements.
30
Governmental
Activities -
Storm Non-major Internal Service
Water Sewer Water Arena Totals Funds
OPERATING REVENUES
Charges for services 1,931,232$ 1,946,722$ 1,315,130$ 437,842$ 5,630,926$ -$
Surcharges and penalties 321,122 15,648 6,272 - 343,042 -
Water meters 96,658 - - - 96,658 -
Total Operating Revenues 2,349,012 1,962,370 1,321,402 437,842 6,070,626 -
OPERATING EXPENSES
Personnel services 539,097 532,341 477,784 244,485 1,793,707 -
Supplies 241,371 18,885 17,339 22,477 300,072 2,655
Professional services and charges 101,628 15,066 60,632 29,384 206,710 42,326
Other services and charges 1,033,320 242,900 399,333 193,471 1,869,024 401,780
Metro sewer charges - 1,303,112 - - 1,303,112 -
Depreciation 906,447 940,717 777,665 60,670 2,685,499 -
Total Operating Expenses 2,821,863 3,053,021 1,732,753 550,487 8,158,124 446,761
Operating Income (Loss)(472,851) (1,090,651) (411,351) (112,645) (2,087,498) (446,761)
NONOPERATING REVENUES (EXPENSES)
Connection fees 951,990 463,178 436,345 - 1,851,513 -
Taxes - - - - - 380,000
Intergovernmental 720 712 2,521 314 4,267 -
Interest earnings 229,899 159,587 229,069 9,639 628,194 1,074
Change in fair value of investments 38,190 24,273 5,004 - 67,467 -
Interest expense and fiscal agent fees (23,878) - - - (23,878) -
Total Nonoperating Revenues 1,196,921 647,750 672,939 9,953 2,527,563 381,074
Income (loss) before contributions
and transfers 724,070 (442,901) 261,588 (102,692) 440,065 (65,687)
Capital contributions, including
special assessments 707,410 545,521 1,126,522 - 2,379,453 -
Transfers in 68,182 - 61 130,000 198,243 -
Transfers out (825,494) (20,456) (251,254) (3,500) (1,100,704) -
Change in Net Position 674,168 82,164 1,136,917 23,808 1,917,057 (65,687)
TOTAL NET POSITION - Beginning 44,697,610 34,724,406 43,852,046 1,698,072 124,972,134 450,831
TOTAL NET POSITION - ENDING 45,371,778$ 34,806,570$ 44,988,963$ 1,721,880$ 126,889,191$ 385,144$
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, 2019
See accompanying notes to financial statements.
31
GovernmentalActivities - StormNon major Internal Water SewerWaterArenaTotalsService FundCASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers 3,330,855$ 2,447,855$ 1,807,593$ 412,697$ 7,999,000$ -$ Cash paid to suppliers for goods and services (1,378,859) (1,540,166) (422,626) (266,682) (3,608,333) (447,239) Cash paid for employees (535,012) (528,340) (474,618) (243,178) (1,781,148) - Net Cash Flows From (Used by) Operating Activities 1,416,984 379,349 910,349 (97,163) 2,609,519 (447,239) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Property taxes- - - - - 380,000 Repayment of advance to other governmental units - - 54,483 - 54,483 - Transfers from other funds 68,182 - 61 130,000 198,243 - Transfers to other funds (825,494) (20,456) (251,254) (3,500) (1,100,704) - Net Cash Flows From (Used by) Noncapital Financing Activities (757,312) (20,456) (196,710) 126,500 (847,978) 380,000 CASH FLOWS FROM INVESTING ACTIVITIES Marketable securities purchased (4,136,810) (2,765,727) (4,259,996) (102,041) (11,264,574) - Marketable securities sold 4,306,625 3,222,761 4,448,774 350,000 12,328,160 - Interest earnings229,899 159,587 229,069 9,639 628,194 1,074 Net Cash Flows From (Used by) Investing Activities 399,714 616,621 417,847 257,598 1,691,780 1,074 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Debt retired(150,916) - - - (150,916) - Interest paid(33,316) - - - (33,316) - Acquisition and construction of capital assets (23,692) (47,851) (207,852) - (279,395) - Contribution received for construction 243,871 96,494 136,891 - 477,256 - Net Cash Flows From (Used by) Capital and Related Financing Activities 35,947 48,643 (70,961) - 13,629 - Net Increase (Decrease) in Cash and Cash Equivalents1,095,333 1,024,157 1,060,525 286,935 3,466,950 (66,165) CASH AND CASH EQUIVALENTS - Beginning of Year 1,628,872 604,876 749,248 186,565 3,169,561 144,470 CASH AND CASH EQUIVALENTS - END OF YEAR2,724,205$ 1,629,033$ 1,809,773$ 473,500$ 6,636,511$ 78,305$ RECONCILIATION OF CASH AND CASH EQUIVALENTS Cash and Investments per Statement of Net Position11,795,343$ 7,423,290$ 9,265,707$ 573,500$ 29,057,840$ 78,305$ Less: Non Cash Equivalents(9,071,138) (5,794,257) (7,455,934) (100,000) (22,421,329) - CASH AND CASH EQUIVALENTS PER STATEMENT OF CASH FLOWS2,724,205$ 1,629,033$ 1,809,773$ 473,500$ 6,636,511$ 78,305$ CITY OF ROSEMOUNT STATEMENT OF CASH FLOWSPROPRIETARY FUNDSFor the Year Ended December 31, 2019Business-Type Activities - Enterprise FundsSee accompanying notes to financial statements.32
GovernmentalActivities - Water Sewer Storm Non major Internal UtilityUtilityWaterArenaTotalsService FundsRECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH FLOWS FROM (USED BY) OPERATING ACTIVITIES Operating income (loss) (472,851)$ (1,090,651)$ (411,351)$ (112,645)$ (2,087,498)$ (446,761)$ Nonoperating income 952,710 463,890 438,866 314 1,855,780 - Adjustments to Reconcile Operating (Loss) to Net Cash Flows From (Used by) Operating Activities Noncash items included in income Depreciation906,447 940,717 777,665 60,670 2,685,499 - Change in assets and liabilities Accounts receivable 58,815 21,595 47,325 (25,459) 102,276 - Prepaid items(1,150) (6,652) (1,311) (155) (9,268) 167 Accounts payable (27,085) 51,285 24,769 (15,984) 32,985 (645) Other current liabilities (13,606) (12,557) (8,106) (6,014) (40,283) - Accrued liabilities(8,277) (8,348) 18,854 (2,887) (658) - Other post employment benefits related deferrals and liabilities 844 834 699 369 2,746 - Pension related deferrals and liabilities 21,137 19,236 22,939 4,628 67,940 - NET CASH FLOWS FROM (USED BY) OPERATING ACTIVITIES1,416,984$ 379,349$ 910,349$ (97,163)$ 2,609,519$ (447,239)$ NONCASH CAPITAL, INVESTING AND FINANCING ACTIVITIESThe Water Utility received contributed plant of $512,754 during the year. The Sewer Utility received contributed plant of $451,846 during the year. The Storm Water Utility received contributed plant of $955,430 during the year.Construction in progress included in the Water Utility accounts payable was $24,158. Construction in progress included in the Storm Water Utility accounts payable was $332,425.Unrealized gain on investments were $38,190 for the Water Utility, $24,273 for the Sewer Utility and $5,004 for the Storm Water Utility for the year.Business-Type Activities - Enterprise FundsSee accompanying notes to financial statements.33
CITY OF ROSEMOUNT
INDEX TO NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
34
NOTE Page
I. Summary of Significant Accounting Policies 35
A. Reporting Entity 35
B. Government-Wide and Fund Financial Statements 36
C. Measurement Focus, Basis of Accounting,
and Financial Statement Presentation 38
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows
of Resources, and Net Position or Equity 39
1. Deposits and Investments 39
2. Receivables 40
3. Inventories and Prepaid Items 41
4. Capital Assets 42
5. Deferred Outflows of Resources 42
6. Compensated Absences 43
7. Long-Term Obligations/Conduit Debt 43
8. Deferred Inflows of Resources 43
9. Equity Classifications 44
10. Pension 45
II. Reconciliation of Government-Wide and Fund Financial Statements 46
A. Explanation of Certain Differences Between the
Governmental Funds Balance Sheet and the Statement of Net Position 46
III. Stewardship, Compliance, and Accountability 46
A. Budgetary Information 46
B. Excess Expenditures Over Appropriations 47
IV. Detailed Notes on All Activities and Funds 47
A. Deposits and Investments 47
B. Receivables 50
C. Capital Assets 51
D. Interfund Transfers 53
E. Long-Term Obligations 54
F. Lease Disclosures 56
G. Net Position/Fund Balances 57
V. Other Information 59
A. Employees’ Retirement System 59
B. Risk Management 72
C. Commitments and Contingencies 73
D. Postemployment Benefits Other Than Pensions 74
E. Effect of New Accounting Standards on Current-Period Financial Statements 76
F. Subsequent Event 76
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
35
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 three methods, discrete presentation, blending or fiduciary.
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, 2019
36
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 of 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.
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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
37
NOTE I – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS (cont.)
Fund Financial Statements (cont.)
The City reports the following major governmental funds:
General Fund – accounts for the City’s primary operating activities. It is used to account for 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 nonmajor 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 Fund
Fire Safety Education Fund
GIS Fund
Port Authority General Fund
Enterprise Funds – may be used to report any activity for which a fee is charged to external
users 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, 2019
38
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, pension, and OPEB 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, 2019
39
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, 2019
40
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 of each year, and certified to Dakota County for
collection in the following year. In Minnesota, counties act as collection agents for all property taxes,
spreading the levies over all taxable property. Such taxes become a lien on January 1 and are recorded
as receivables by the City on that date. Tax levies on real property are payable 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 a year: in January, July, and December.
Property taxes are accrued and recognized as revenue in the year levied in the government-wide
financial statements and proprietary fund financial statements. In the governmental fund financial
statements, taxes are recognized as revenue when received in cash or within 60 days after year-end.
Taxes which remain unpaid on December 31 are classified as delinquent taxes receivable, and are offset
by a deferred inflow of resources in the governmental fund financial statements.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
41
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.)
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, 2019
42
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. 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, 2019
43
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 year-end 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, capital lease obligations, other postemployment benefits, 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 three issues
outstanding could not be determined; however, their original issue amounts totaled $8,294,720.
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, 2019
44
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, 2019
45
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 and transfers out. The
balance at year-end was $7,893,190, or 55 percent, and is included in unassigned general fund balance.
Proprietary fund equity is classified the same as in the government-wide statements.
10. 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, 2019
46
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 $10,405,264 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.
Bond and notes payable $ 8,695,000
Capital lease obligations 289,219
Compensated absences 1,104,168
Unamortized premium on bonds payable 194,982
Accrued interest 121,895
Combined Adjustment for Long-Term Liabilities $ 10,405,264
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
$9,574,634.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
47
NOTE III – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
B. EXCESS EXPENDITURES OVER APPROPRIATIONS
Budgeted Actual Excess
Fund Expenditures Expenditures Expenditures
Building CIP sub-fund $ 522,500 $ 1,364,003 $ 841,503
Equipment CIP sub-fund 882,156 1,013,488 131,332
Some individual departments experienced expenditures which exceeded appropriations. The detail of
those items can be found in the City's year-end budget to actual reports. These variances were financed
with revenues and other financing sources in excess of budget or available fund balance.
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 26,737,024 28,420,567 Custodial credit risk
Negotiable CDs 17,754,877 17,754,877
Custodial credit, credit,
concentration of credit,
interest rate risk
US Agencies 16,327,802 16,327,802
Custodial credit, credit,
concentration of credit,
interest rate risk
Total Cash and Investments $ 60,822,103 $ 62,505,646
Reconciliation to the financial statements:
Per statement of net position
Cash and investments $ 60,822,103
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
48
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
A. DEPOSITS AND INVESTMENTS (cont.)
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.
The valuation methods for recurring fair value measurements of the Level 2 investments are as follows:
Automated method – IDC Institutional Bond Pricing
Automated method – IDC CD Pricing
Matrix pricing based upon yields and effective maturity
December 31, 2019
Investment Type Level 1 Level 2 Level 3 Total
U.S. Agencies $ - $ 16,327,802 $ - $ 16,327,802
Negotiable CDs - 17,754,877 - 17,754,877
Totals $ - $ 34,082,679 $ - $ 34,082,679
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, 2019, the banks had pledged
various government securities in the amount of $14,189,149 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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
49
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
A. DEPOSITS AND INVESTMENTS (cont.)
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, 2019, 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.
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, 2019, the City of Rosemount’s investment portfolio was concentrated as follows:
Issuer Investment Type Percentage of Total
Federal Home Loan Bank US Agencies 17%
Federal Home Loan Mortgage Corporation US Agencies 14%
Federal Farm Credit Bank US Agencies 16%
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, 2019, 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
U.S. Agencies $ 16,327,802 $ - $ 14,647,257 $ 1,680,545
Negotiable CDs 17,754,877 3,392,000 14,122,877 240,000
Totals $ 34,082,679 $ 3,392,000 $ 28,770,134 $ 1,920,545
At December 31, 2019, the City held $2,098,146 in U.S. 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, 2019
50
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 $ 4,622 $ 41,503 $ 242,410 $ 288,535
Business-Type Activities
Water
Utility
Sewer
Utility
Storm Water
Utility Totals
Amounts not expected to be collected
within one year $ 33,899 $ 23,723 $ 21,546 $ 79,168
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 $ 79,262 $ - $ 79,262
Delinquent special assessments 779 - 779
Special assessments not yet due 1,013,150 2,099,749 3,112,899
Donations receivable for future projects 96,531 - 96,531
Total Unearned/Unavailable Revenue
for Governmental Funds $ 1,189,722 $ 2,099,749 $ 3,289,471
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
51
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2019 was as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental Activities
Capital assets not being depreciated
Land $ 8,079,024 $ - $ 192,178 $ 7,886,846
Land improvements 2,647,412 1,726,403 - 4,373,815
Construction in progress 8,204,992 6,766,807 3,352,458 11,619,341
Total Capital Assets
Not Being Depreciated 18,931,428 8,493,210 3,544,636 23,880,002
Capital assets being depreciated
Land improvements 4,117,807 466,858 - 4,584,665
Buildings 17,358,045 79,125 - 17,437,170
Machinery and equipment 13,057,128 742,665 417,056 13,382,737
Infrastructure:
Other 209,037 - - 209,037
Roads 62,922,018 915,775 - 63,837,793
Bridges 2,034,591 - - 2,034,591
Parking lots 1,358,831 - - 1,358,831
Total Capital Assets Being Depreciated 101,057,457 2,204,423 417,056 102,844,824
Less: Accumulated depreciation for
Land improvements (1,770,595) (185,331) - (1,955,926)
Buildings (5,993,952) (346,686) - (6,340,638)
Machinery and equipment (7,105,807) (948,492) 373,114 (7,681,185)
Infrastructure:
Other (25,263) (5,336) - (30,599)
Roads (13,494,275) (1,071,523) - (14,565,798)
Bridges (632,430) (50,865) - (683,295)
Parking lots (264,104) (30,346) - (294,450)
Total Accumulated Depreciation (29,286,426) (2,638,579) 373,114 (31,551,891)
Net Capital Assets
Being Depreciated 71,771,031 (434,156) 43,942 71,292,933
Total Governmental Activities
Capital Assets, Net of
Accumulated Depreciation $ 90,702,459 $ 8,059,054 $ 3,588,578 $ 95,172,935
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
52
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS (cont.)
Depreciation expense was charged to functions as follows:
Governmental Activities
General government $ 321,794
Public safety 378,871
Public works, which includes the depreciation of roads, bridges and parking lots 1,584,952
Culture, education and recreation 352,962
Total Governmental Activities Depreciation Expense $ 2,638,579
Beginning Ending
Balance Additions Deletions Balance
Business-Type Activities
Capital assets not being depreciated
Land $ 2,728,077 $ 165,200 $ - $ 2,893,277
Construction in progress 181,450 2,247,257 1,754,830 673,877
Total Capital Assets
Not Being Depreciated 2,909,527 2,412,457 1,754,830 3,567,154
Capital assets being depreciated
Buildings 12,110,980 - - 12,110,980
Machinery and equipment 4,311,000 143,551 11,097 4,443,454
Infrastructure - mains and lines and other
improvements 142,190,832
1,754,830
-
143,945,662
Total Capital Assets
Being Depreciated 158,612,812 1,898,381 11,097 160,500,096
Less: Accumulated depreciation for
Buildings (4,144,923) (269,975) - (4,414,898)
Machinery and equipment (2,293,098) (234,103) 5,565 (2,521,636)
Infrastructure - mains and lines and other
improvements (55,755,587) (2,181,421) - (57,937,008)
Total Accumulated Depreciation (62,193,608) (2,685,499) 5,565 (64,873,542)
Net Capital Assets
Being Depreciated 96,419,204 (787,118) 5,532 95,626,554
Total Business-Type
Capital Assets, Net of
Accumulated Depreciation $ 99,328,731 $ 1,625,339 $ 1,760,362 $ 99,193,708
Depreciation expense was charged to functions as follows:
Business-Type Activities
Water $ 906,447
Sewer 940,717
Stormwater 777,665
Arena 60,670
Total Business-type Activities Depreciation Expense $ 2,685,499
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
53
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
D. INTERFUND TRANSFERS
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 3,880 Reimbursement of capital
project costs
Debt Service Water 72,000 Water share of debt payment
Capital Projects Water 753,494 Share of capital project costs
Sewer 20,456 Share of capital project costs
Storm Water 251,254 Share of capital project costs
General 169,000 Share of capital project costs
Enterprise
Water Capital Projects 68,182 Reimbursement of capital
project costs
Storm Water Capital Projects 61 Reimbursement of capital
project costs
Arena General 130,000 Operating expenses
Subtotal – Fund Financial Statements 1,471,827
Less: Government-wide transfers (247,297)
Less: Fund eliminations (569,366)
Total Transfers – Government-Wide
Statement of Activities
$ 655,164
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, 2019
54
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG-TERM OBLIGATIONS
Long-term obligations activity for the year ended December 31, 2019 was as follows:
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable
General obligation debt $ 10,140,000 $ - $ 1,445,000 $ 8,695,000 $ 1,330,000
Add: Premiums 222,848 - 27,866 194,982 -
Sub-totals 10,362,848 - 1,472,866 8,889,982 1,330,000
Other Liabilities
Vested compensated absences 1,022,602 572,415 490,849 1,104,168 530,001
Capital lease liabilities 245,121 166,131 122,033 289,219 87,620
Net pension liability 5,199,026 514,987 420,010 5,294,003 -
Other postemployment benefits 712,435 20,744 - 733,179 -
Total Other Liabilities 7,179,184 1,274,277 1,032,892 7,420,569 617,621
Total Governmental Activities
Long-Term Liabilities $ 17,542,032 $ 1,274,277 $ 2,505,758 $ 16,310,551 $ 1,947,621
BUSINESS-TYPE ACTIVITIES
Bonds and Notes Payable
General obligation debt $ 1,255,000 $ - $ 145,000 $ 1,110,000 $ 145,000
Add: Premiums 65,834 - 8,229 57,605 -
Sub-totals 1,320,834 - 153,229 1,167,605 145,000
Other Liabilities:
Vested compensated absences 208,435 99,391 100,049 207,777 99,733
Capital lease liabilities 30,252 - 11,448 18,804 5,641
Net pension liability 940,306 103,693 61,655 982,344 -
Other postemployment benefits 93,852 2,869 - 96,721 -
Total Other Liabilities 1,272,845 205,953 173,152 1,305,646 105,374
Total Business-type Activities
Long-Term Liabilities $ 2,593,679 $ 205,953 $ 326,381 $ 2,473,251 $ 250,374
General Obligation Debt
All general obligation bonds payable are backed by the full faith and credit of the City. Tax incremental
bonds are paid by segregated property taxes, but are ultimately backed by the full faith and credit of the
City if incremental taxes are inadequate to meet payments. Remaining bonds in the governmental funds
will be retired by future property tax levies 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, 2019
55
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 12-31-19
Port Authority TIF, Series 2008A 2008 2024 5.0% to 5.5% $ 2,765,000 $ 1,465,000
Port Authority TIF, Crossover Refunding
Bonds, Series 2010B
2010
2022
1.2% to 3.7%
1,355,000
445,000
Improvement Bonds, Series 2014A 2014 2025 0.35% to 2.4% 2,400,000 830,000
Fire Station Refunding Bonds, Series
2015B
2015 2025 1.5% to 3.0% 1,345,000 935,000
Port Authority TIF Crossover Refunding
Bonds, Series 2015A
2015 2032 3.0% 3,335,000 3,315,000
Improvement Bonds, Series 2017A 2017 2023 3.0% 1,055,000 870,000
Improvement Bonds, Series 2018A 2018 2024 5.0% 835,000 835,000
Total Governmental Activities – General Obligation Debt $ 8,695,000
Business-type Activities Date of Final Interest Original Balance
General Obligation Debt Issue Maturity Rates Indebtedness 12-31-19
Water Revenue Bonds, Series 2015A 2015 2026 1.5% to 3.0% $ 1,525,000 $ 1,110,000
Debt service requirements to maturity are as follows:
Governmental Activities Business-Type Activities
General Obligation Debt General Obligation Debt
Year Principal Interest Principal Interest
2020 $ 1,330,000 $ 271,980 $ 145,000 $ 28,730
2021 1,050,000 230,989 150,000 25,043
2022 1,090,000 188,891 155,000 21,036
2023 980,000 147,445 160,000 16,705
2024 780,000 110,693 165,000 12,154
2025 – 2029 2,185,000 315,911 335,000 10,001
2030 – 2032 1,280,000 57,832 - -
Totals $ 8,695,000 $ 1,323,741 $ 1,110,000 $ 113,669
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
56
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG-TERM OBLIGATIONS (cont.)
Other Debt Information
Estimated payments of compensated absences, other postemployment benefits liability, and the net
pension liability are not included in the debt service requirement schedules. The compensated absences
liability, other postemployment benefits 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 utility has pledged future revenues, net of specified operating expenses, to repay revenue
bonds issued in 2015. Proceeds from the bonds provided financing for utility improvements. The bonds
are payable solely from 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 $1,223,669. Principal and interest paid on these bonds for the
current year and the gross customer revenues were $176,993 and $3,301,003, respectively.
F. LEASE DISCLOSURES
Lessee – Capital Leases
During 2019 and 2018, the City acquired capital assets through multiple lease/purchase agreements. The
gross amount of these assets under capital leases is $620,513 and $49,862, which are included in the
machinery and equipment asset category of capital assets, less accumulated depreciation of $180,291
and $18,086 in governmental activities and business-type activities, respectively. A portion of these
capital assets were not financed through lease arrangements but rather paid by the City upon purchase,
these amounts are $221,899 in governmental activities and $21,720 in business-type activities.
A corresponding liability is recorded in the government-wide statement of net position. The liability of the
capital lease obligations that were capitalized at December 31, 2019 was $289,219 in governmental
activities and $18,804 in the business-type activities (all included in the water utility). Principal and
interest payments in fiscal year 2019 totaled $92,107 in governmental activities and $6,740 in business-
type activities. The capital lease liability attributable to governmental activities will be liquidated by the
capital projects fund. The lease agreement contains certain provisions that in the event of default the
lessor may demand and receive immediate position of the leased property or recover all amounts owed
by the City.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
57
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
F. LEASE DISCLOSURES
Lessee – Capital Leases (cont.)
A schedule of future lease payments as of December 31, 2019, are as follows:
Governmental
Activities
Business-Type
Activities
Year Vehicles Vehicles
2020 $ 87,620 $ 5,641
2021 87,620 5,641
2022 68,357 5,641
2023 33,469 1,881
2024 12,153 -
Totals $ 289,219 $ 18,804
G. NET POSITION/FUND BALANCES
Net position reported on the government-wide statement of net position at December 31, 2019 includes
the following:
Governmental Activities
Net Investment in Capital Assets
Land $ 7,886,846
Nondepreciable land improvements 4,373,815
Construction in progress 11,619,341
Other capital assets, net of accumulated depreciation 71,292,933
Less: related long-term debt outstanding (excluding unspent
capital-related debt proceeds) (9,179,201
)
Total Net Investment in Capital Assets $ 85,993,734
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
58
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
G. NET POSITION/FUND BALANCES (cont.)
Governmental Funds
Governmental fund balances reported on the fund financial statements at December 31, 2019 include
the following:
General Fund
Debt
Service
Capital
Projects
Port
Authority
TIF
Nonmajor
Funds Totals
Fund Balances
Nonspendable:
Prepaid items $ - $ - $ - $ - $ 529 $ 529
Restricted for:
Debt service - 2,449,174 - - - 2,449,174
Port Authority TIF - - - 2,395,413 - 2,395,413
PEG Fees - - - - 76,936 76,936
Sub-total - 2,449,174 - 2,395,413 76,936 4,921,523
Committed for:
Fire safety education - - - - 3,720 3,720
GIS - - - - 67,085 67,085
Port authority – general - - - - 446,297 446,297
Sub-total - - - - 517,102 517,102
Assigned for:
Compensated absences 1,104,168 - - - - 1,104,168
Health insurance 150,700 - - - - 150,700
Comp plan 15,000 - - - - 15,000
Building maintenance 159,584 - - - - 159,584
Park maintenance 558,024 - - - - 558,024
Parking lot maintenance 147,000 - - - - 147,000
Street chemicals 14,021 - - - - 14,021
Landscaping projects 44,391 - - - - 44,391
Election equipment 39,934 - - - - 39,934
Economic development 50,000 - - - - 50,000
Various projects/equipment 383,028 - 10,951,547 - - 11,334,575
Building CIP - - 2,104,877 - - 2,104,877
Street CIP - - 303,748 - - 303,748
Equipment CIP - - 496,760 - - 496,760
Sub-total 2,665,850 - 13,856,932 16,522,782
Unassigned: 7,893,190 - - - - 7,893,190
Total Fund Balances $ 10,559,040 $ 2,449,174 $ 13,856,932 $ 2,395,413 $ 594,567 $ 29,855,126
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
59
NOTE IV – DETAILED NOTES ON ALL FUNDS (cont.)
G. NET POSITION/FUND BALANCES (cont.)
Business-Type Activities
Net Investment in Capital Assets
Land $ 2,893,277
Construction in progress 673,877
Other capital assets, net of accumulated depreciation 95,626,554
Less: related long-term debt outstanding (excluding unspent
capital related debt proceeds) (1,186,409)
Total Net Investment in Capital Assets $ 98,007,299
NOTE V – OTHER INFORMATION
A. EMPLOYEES’ RETIREMENT SYSTEM
Employees of the City participate in three defined benefit pension plans. Two of the plans are state-wide
cost-sharing, multiple employer defined benefit pension plans administered by the Public Employees
Retirement Association (PERA) of Minnesota: the General Employees Retirement Fund (GERF) and the
Public Employees Police and Fire Fund (PEPFF). The third is a single-employer defined benefit pension
plan administered through the Rosemount Fire Fighters’ Relief Association (the Association). The details
of the City’s participation in each of these plans are presented later in these notes. The following table
summarizes the impact of these plans on the City’s government-wide financial statements:
State-Wide PERA Pension Plans
Rosemount Fire
Department
Relief Association
Total
All Plans
GERF PEPFF Total
Net pension asset $ - $ - $ - $ 1,314,661 $ 1,314,661
Deferred outflows 485,558 2,338,976 2,824,534 295,340 3,119,874
Net pension liability 3,875,672 2,400,675 6,276,347 - 6,276,347
Deferred inflows 676,912 3,305,998 3,982,910 230,337 4,213,247
Pension expense 550,733 383,870 934,603 161,655 1,096,258
Public Employees Retirement Association (PERA)
Plan description. All full-time and certain part-time employees of the City are covered by 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.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
60
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
1. General Employees Retirement Plan
General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are
covered by Social Security.
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.
Benefits. PERA provides retirement, disability, and death benefits. Benefit provisions are established by
state statute and can only be modified by the state Legislature. Vested, terminated employees who are
entitled to benefits, but are not receiving them yet, are bound by the provisions in effect at the time they
last terminated their public service.
1. 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 methods
are used to compute benefits for PERA's Coordinated Plan members. Members hired prior to July 1,
1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired
after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2 percent of average
salary for each of the first 10 years of service and 1.7 percent of average salary for each additional year.
Under Method 2, the accrual rate for Coordinated members is 1.7 percent of average salary for all years
of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of
service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal
retirement age is the age for unreduced Social Security benefits capped at 66.
Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning
January 1, 2019, the postretirement increase will be equal to 50 percent of the cost-of-living adjustment
(COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of
1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the
June 30 before the effective date of the increase will receive the full increase. For recipients receiving the
annuity or benefit for at least one month but less than a full year as of the June 30 before the effective
date of the increase will receive a reduced prorated increase. For members retiring on January 1, 2024,
or later, the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or
age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from
the delay to normal retirement.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
61
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
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. A full, unreduced pension is earned when
members are age 55 and vested, or for members who were first hired prior to July 1, 1989, when age
plus years of service equal at least 90.
Annuities, disability benefits, and survivor benefits are increased effective every January 1. Beginning
January 1, 2019, the postretirement increase will be fixed at 1 percent. Recipients that have been
receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the
increase will receive the full increase. For recipients receiving the annuity or benefit for at least 25 months
but less than 36 months as of the June 30 before the effective date of the increase will receive a reduced
prorated increase.
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
Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in
fiscal year 2019 and the City was required to contribute 7.50 percent for Coordinated Plan members. The
City’s contributions to the General Employees Plan for the year ended December 31, 2019, were
$397,839. The City’s contributions were equal to the required contributions as set by state statute.
2. Police and Fire Plan Contributions
Police and Fire member’s contribution rates increased from 10.8 percent of pay to 11.3 percent for fiscal
year 2019 and employer rates increased from 16.20 percent to 16.95 percent for fiscal year 2019. The
City’s contributions to the Police and Fire Plan for the year ended December 31, 2019, were $418,417.
The City’s contributions were equal to the required contributions as set by state statute.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
62
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Pension Costs
1. General Employees Fund Pension Costs
At December 31, 2019, the City reported a liability of $3,875,672 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 $16 million to the fund in 2019. The State of Minnesota is
considered a nonemployer 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 $120,495. The net pension liability was measured as of June 30, 2019 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, 2018 through
June 30, 2019 relative to the total employer contributions received from all of PERA’s participating
employers.
At June 30, 2019, the City’s proportion share was 0.0701 percent, which was an increase of 0.0013
percent from its proportion measured as of June 30, 2018.
City’s proportionate share of the net pension liability $ 3,875,672
State of Minnesota’s proportionate share of the net
pension liability associated with the City 120,495
Total $ 3,996,167
For the year ended December 31, 2019, the City recognized pension expense of $541,709 for its
proportionate share of the General Employees Plan’s pension expense. In addition, the City recognized
an additional $9,024 as pension expense and grant revenue for its proportionate share of the State of
Minnesota’s contribution of $16 million to the General Employees Fund.
At December 31, 2019, 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 $ 103,845 $ -
Changes of actuarial assumptions 1,976 297,544
Difference between projected and actual investment earnings - 375,309
Changes in proportion 172,192 4,059
Contributions paid to PERA subsequent to measurement date 207,545 -
Totals $ 485,558 $ 676,912
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
63
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.)
$207,545 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, 2020. 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
2020 $ (124,772)
2021 (219,008)
2022 (58,053)
2023 2,934
2. Police and Fire Fund Pension Costs
At December 31, 2019, the City reported a liability of $2,400,675 for its proportionate share of the Police
and Fire Fund’s net pension liability. The net pension liability was measured as of June 30, 2019, 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, 2018,
through June 30, 2019, relative to the total employer contributions received from all of PERA’s
participating employers.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
64
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.)
At June 30, 2019, the City’s proportion was 0.2255 percent, which was an increase of 0.0076 percent
from its proportion measured as of June 30, 2018.
For the year ended December 31, 2019, the City recognized pension expense of $353,428 for its
proportionate share of the Police and Fire Plan’s pension expense. In addition, the City recognized an
additional $30,442, 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 until the plan is
90 percent funded or until the State Patrol Plan (administered by the Minnesota State Retirement System)
is 90 percent funded, whichever occurs later. In addition, the state paid $4.5 million on October 1, 2018
and October 1, 2019 in direct state aid. Thereafter, by October 1 of each year, the state will pay $9 million
until full funding is reached or July 1, 2048, whichever is earlier.
At December 31, 2019, 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 $ 97,007 $ 336,390
Changes in actuarial assumptions 1,818,819 2,454,777
Difference between projected and actual investment earnings - 468,254
Changes in proportion 198,016 46,577
Contributions paid to PERA subsequent to measurement date 225,134 -
Totals $ 2,338,976 $ 3,305,998
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
65
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
$225,134 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, 2020. 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
2020 $ (115,973)
2021 (290,819)
2022 (839,009)
2023 40,758
2024 12,887
Actuarial Assumptions
The total pension liability in the June 30, 2019, 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 for all plans were based on RP 2014 tables for males or females, as
appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases after
retirement for retirees are assumed to be 1.25 percent per year for the General Employees Plan and 1.0
percent per year for the Police and Fire Plan.
Actuarial assumptions used in the June 30, 2019 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 2019. The most recent four-year experience study for Police and Fire Plan was completed
in 2016. Economic assumptions were updated in 2018 based on a review of inflation and investment
return assumptions.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
66
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 and plan provisions occurred in 2019:
General Employees Fund
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State’s special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
Police and Fire Fund
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
There have been no changes since the prior valuation.
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 Target Allocation
Long-Term Expected
Real Rate of Return
Domestic Equity 35.5% 5.10%
Private Markets 25.0 5.90
Fixed Income 20.0 0.75
International Equity 17.5 5.90
Cash Equivalents 2.0 0.00
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
67
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
Actuarial Assumptions (cont.)
Discount rate. The discount rate used to measure the total pension liability in 2019 was 7.50 percent.
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
(6.50%)
Current
Discount Rate
(7.50%)
1% Increase to
Discount Rate
(8.50%)
City’s proportionate share of the
General Employees Fund net
pension liability $6,371,396 $3,875,672 $1,814,956
City’s proportionate share of the
Police and Fire Fund net pension
liability $5,247,430 $2,400,675 $46,455
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
68
NOTE V – OTHER INFORMATION (cont.)
A. EMPLOYEES’ RETIREMENT SYSTEM (cont.)
Public Employees Retirement Association (PERA) (cont.)
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.
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 $7,300 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 the December 31, 2018 valuation date, 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 4
Active members 42
46
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, 2019, the City reported a net pension asset of $1,314,661 for the plan.
The net pension asset was measured as of December 31, 2018. 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, 2018.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
69
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, 2019 $ 2,385,519 $ 3,968,654 $ (1,583,135)
Changes for the year
Service cost 141,612 - 141,612
Interest on pension liability 164,841 - 164,841
Differences between expected and actual
experience (133,406) - (133,406)
Changes of assumptions 57,836 - 57,836
Changes of benefit terms 62,194 - 62,194
Contributions (state and local) - 180,579 (180,579)
Net investment income - (147,171) 147,171
Benefit payments, including member
contribution refunds (170,088) (170,088) -
Administrative expense - (8,805) 8,805
Total net changes 122,989 (145,485) 268,474
Ending balance, December 31, 2019 $ 2,508,508 $ 3,823,169 $ (1,314,661)
For the year ended December 31, 2019, the City recognized pension expense of $161,655.
At December 31, 2019, 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 $ - $ 178,383
Change in actuarial assumptions 71,105 51,954
Net differences between projected and actual
earnings on pension plan investments 194,235 -
Employer contributions subsequent to the
measurement date 30,000 -
Totals $ 295,340 $ 230,337
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
70
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, 2020. 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
2020 $ 49,644
2021 389
2022 14,603
2023 66,551
2024 (15,761)
Thereafter (80,423)
Actuarial assumptions. The total pension liability at December 31, 2018 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, 2018
Measurement Date of Net Pension Asset: December 31, 2018
Actuarial Cost Method: Entry Age Normal
Index rate for 20-year, tax exempt municipal bonds 3.71%
Long-Term Expected Rate of Return: 6.00%
Discount Rate: 6.00%
Inflation: 2.50%
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
71
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, 2018 Minnesota Public Employees’ Retirement Association
Police and Fire Plan actuarial valuation as described below:
Healthy Pre-Retirement – RP-2014 employee generational mortality table projected with mortality
improvement scale MP-2017, from a base year of 2006.
Healthy Post-Retirement and Disabled – RP-2014 annuitant generational mortality table projected
with mortality improvement scale MP-2017 from a base year of 2006. Male rates are adjusted by a
factor of 0.96.
The actuarial assumptions used in the December 31, 2018 valuation were based on the results of an
actuarial experience study for the period January 1, 2018–December 31, 2018.
The benefit lump-sum payment per year of service increased from $7,200 to $7,300.
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 (2.50%). 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 56.68% 4.95% 7.45%
International equity 4.91 5.24 7.74
Fixed income 11.76 1.99 4.49
Real estate and alternatives 0.00 4.19 6.69
Cash and cash equivalents 26.65 0.58 3.08
Total 100.00% 6.30%
Reduced for assumed
investment expense (0.30%)
Net assumed investment return
(weighted avg, rounded to ¼%) 6.00%
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
72
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 6.00 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 $ 1,242,933 $ 1,314,661 $ 1,384,079
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, 2019, 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, 2019
73
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, 2019. Work that has been completed on
these projects but not yet paid for (including contract retainages) is reflected as accounts payable and
expenditures. $938,176 remains on commitments on signed contracts that were not yet 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, 2019 were $147,438.
During 2017 and 2018, the City entered into several subscription agreements with community solar
garden operators to purchase the right to receive bill credits associated with energy production of the
solar community garden projects. The solar capacity and energy will be produced at installations to be
constructed and interconnected with the distribution facilities of Northern States Power Company d/b/a
Xcel Energy. Once the solar project is operating, the City will receive bill credits against its monthly retail
electrical bill from Xcel. The term of the agreement is set to match the term of the power purchase
agreement between Xcel Energy and each solar garden operator of 25 years from the date of commercial
operations. Commercial operations commenced in 2019 for a majority of the projects.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
74
NOTE V – OTHER INFORMATION (cont.)
D. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
General Information About the Plan
Plan description. The City's other postemployment benefit ("OPEB") plan provides insurance benefits for
eligible retirees through the City’s OPEB plan, a single-employer defined benefit plan administered by the
City. All post-employment benefits are based on contractual agreements with employee groups. These
contractual agreements do not include any specific contribution or funding requirements. The plan does
not issue a publically available financial report.
Benefits provided. All retirees of the City have the option under state law to continue their medical
insurance coverage through the City from the time of retirement until the employee reaches the age of
eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to
continue coverage for medical and dental insurance.
The City is legally required to include any retirees for whom it provides health insurance coverage in the
same insurance pool as its active employees, whether the premiums are paid by the City or the retiree.
Consequently, participating retirees are considered to receive a secondary benefit known as an “implicit
rate subsidy.” This benefit relates to the assumption that the retiree is receiving a more favorable
premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to
being included in the same pool with the City’s younger and statistically healthier active employees.
Employees covered by benefit terms. At December 31, 2019, the following employees were covered
by the benefit terms:
Active employees electing coverage 67
Active employees waiving coverage 17
Retirees electing coverage 5
89
Total OPEB Liability
The City's total OPEB liability of $829,900 was measured as of December 31, 2018, and was determined
in accordance with the Alternative Measurement Method (AMM), prescribed by GASB 75 for employers
with under 100 plan participants, as of that date, in place of an actuarial valuation.
Valuation assumptions and other inputs. The total OPEB liability in the December 31, 2017 valuation
was determined using the following valuation assumptions and other inputs, applied to all periods
included in the measurement, unless otherwise specified:
Discount Rate 3.71%, based on Index rate for 20-year, tax exempt municipal bonds
Inflation 2.50%
Healthcare cost
trend rates
6.9% initially, decreased annually to a minimum of 5.2% in 2021, gradually
decreasing over several decades to an ultimate rate of 4.0% in 2075 and later years.
In addition, the medical trend rates above were increased to reflect the projected
effect of the Affordable Care Act's Excise Tax on high cost health insurance plans.
The additional trend rate adjustments vary by year, but average 0.37% beginning
calendar year 2022 for plans other than Medicare plans.
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
75
NOTE V – OTHER INFORMATION (cont.)
D. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont.)
Total OPEB Liability (cont.)
Salary increases were based on a service-related table. Mortality rates were based on the RP 2014
tables (with adjustments) as the base table and project future improvements with MP-2018 generational
improvement scale, as adopted by the Council in connection with the 2015 six-year Experience Study for
the General Employees Plan and the 2016 four-year Experience Study for the Police and Fire Plan and
performed by the actuary for the Public Employees Retirement Association of Minnesota.
The valuation assumptions used in the December 31, 2017 valuation were based on the results of the
Public Employees Retirement Association of Minnesota actuarial valuation as of June 30, 2017.
Changes in the Total OPEB Liability
Balance at December 31, 2018 $ 806,287
Changes for the year:
Service cost 68,385
Interest 28,211
Changes in assumptions or other inputs (28,245)
Benefit payments (44,738)
Net changes 23,613
Balance at December 31, 2019 $ 829,900
Changes of assumptions or other inputs reflect an update of demographic assumptions based upon the
most recent PERA experience studies, a change in the annual claim costs to reflect current medical
provisions and premiums, and an update to the medical trend rates to be consistent with the most recent
Getzen model application.
Sensitivity of the total OPEB liability to changes in the discount rate. The following presents the total
OPEB liability of the City, as well as what the City's total OPEB liability would be if it were calculated using
a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount
rate:
1% Decrease Discount Rate 1% Increase
(2.71%) (3.71%) (4.71%)
Total OPEB Liability $ 902,655 $ 829,900 $ 764,030
Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The following
presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it
were calculated using healthcare cost trend rates that are 1-percentage-point lower or
1-percentage-point higher than the current healthcare cost trend rates:
Current Trend
1% Decrease Rate 1% Increase
Total OPEB Liability $ 736,498 $ 829,900 $ 940,960
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
As of and for the Year Ended December 31, 2019
76
NOTE V – OTHER INFORMATION (cont.)
D. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (cont.)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources
Related to OPEB
For the year ended December 31, 2019, the City recognized OPEB expense of $68,351. At
December 31, 2019, the City reported deferred outflows of resources and deferred inflows of resources
related to OPEB from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Employer contributions subsequent to the
measurement date $ 45,758 $ -
The AMM method only allows amortization of investment gains and losses, of which the City’s plan had
none. All other gains and losses due to experience and assumption changes are recognized immediately
in the annual OPEB expense. $45,758 reported as deferred outflows related to OPEB resulting from the
employer contributions subsequent to the measurement date will be recognized as a reduction of the net
OPEB liability in the year ended December 31, 2020.
E. EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT-PERIOD FINANCIAL STATEMENTS
The Governmental Accounting Standards Board (GASB) has approved the following:
Statement No. 87, Leases
Statement No. 91, Conduit Debt Obligations
When they become effective, application of these standards may restate portions of these financial
statements.
F. SUBSEQUENT EVENT
In December 2019, a novel strain of coronavirus was reported in Wuhan, Hubei province, China. In the
first several months of 2020, the virus, SARS-CoV-2, and resulting disease, COVID-19, spread to the
United States, including to areas impacting the City. Currently, the City’s evaluation of the effects of these
events is ongoing; however, this situation could result in declines in revenues such as state aids, a
decrease in demand for certain services, an increase in delinquencies or uncollectible accounts
receivable, decreases in investment valuations and decreased investment income, timing or ability to
issue bonds or obtain financing (as the market has been disrupted), and increased costs related to labor
and insurance.
The extent of the impact of COVID-19 on the City’s operational and financial performance will depend on
future developments, including the duration and spread of the outbreak and related governmental or other
regulatory actions.
R E Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N
Variance with
REVENUES Original Final Actual Final Budget
TAXES
General property tax 8,775,267$ 8,775,267$ 8,732,291$ (42,976)$
Fiscal disparities 1,305,333 1,305,333 1,305,333 -
Other 390,000 390,000 390,584 584
Total Taxes 10,470,600 10,470,600 10,428,208 (42,392)
INTERGOVERNMENTAL REVENUES
Federal grants - - 3,273 3,273
State aid - police 212,000 212,000 256,896 44,896
State aid - general government 62,000 62,000 88,925 26,925
State aid - highway 300,000 300,000 300,431 431
Other 102,500 102,500 99,717 (2,783)
Total Intergovernmental Revenues 676,500 676,500 749,242 72,742
PUBLIC CHARGES FOR SERVICES
General government 1,158,700 1,158,700 1,216,769 58,069
Public safety 38,400 38,400 40,909 2,509
Highways and streets 56,500 56,500 67,824 11,324
Culture, education and recreation 259,500 259,500 322,676 63,176
SAC 4,500 4,500 8,499 3,999
Total Charges for Services 1,517,600 1,517,600 1,656,677 139,077
LICENSES AND PERMITS
Business 57,500 57,500 63,925 6,425
Non-business 692,300 692,300 862,013 169,713
Total Licenses and Permits 749,800 749,800 925,938 176,138
FINES AND FORFEITURES
County 115,000 115,000 109,083 (5,917)
SPECIAL ASSESSMENTS - - 171 171
INVESTMENT INCOME AND MISCELLANEOUS
Interest earnings 151,000 151,000 230,720 79,720
Change in fair value of investments - - 92,247 92,247
Miscellaneous general revenues 16,200 16,200 7,648 (8,552)
Donations - 18,098 18,016 (82)
Rents 2,500 2,500 2,600 100
Total Investment Income and Miscellaneous 169,700 187,798 351,231 163,433
Total Revenues 13,699,200 13,717,298 14,220,550 503,252
OTHER FINANCING SOURCES
Transfers in 3,500 3,500 7,380 3,880
TOTAL REVENUES AND OTHER
FINANCING SOURCES 13,702,700$ 13,720,798$ 14,227,930$ 507,132$
Budgeted Amounts
For the Year Ended December 31, 2019
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.
77
Variance with
CURRENT EXPENDITURES Original Final Actual Final Budget
GENERAL GOVERNMENT
Mayor and council 325,000$ 325,000$ 380,963$ (55,963)$
Executive 680,300 680,300 669,197 11,103
Elections 20,000 20,000 2,753 17,247
Finance 631,700 631,700 622,941 8,759
Community development 1,090,000 1,090,000 1,089,883 117
General government 353,400 353,400 363,613 (10,213)
TOTAL GENERAL GOVERNMENT 3,100,400 3,100,400 3,129,350 (28,950)
PUBLIC SAFETY
Police department 4,433,300 4,445,101 4,293,550 151,551
Fire department 453,000 453,936 408,952 44,984
TOTAL PUBLIC SAFETY 4,886,300 4,899,037 4,702,502 196,535
PUBLIC WORKS
Government building maintenance 668,600 668,600 649,644 18,956
Fleet maintenance 644,500 644,500 638,053 6,447
Street maintenance 1,517,800 1,517,800 1,514,286 3,514
Park maintenance 1,119,800 1,119,800 1,104,427 15,373
TOTAL PUBLIC WORKS 3,950,700 3,950,700 3,906,410 44,290
CULTURE, EDUCATION AND RECREATION 1,635,300 1,640,579 1,751,115 (110,536)
OTHER FINANCING USES
Transfers out 130,000 130,000 299,000 (169,000)
TOTAL EXPENDITURES AND
OTHER FINANCING USES 13,702,700$ 13,720,716$ 13,788,377 (67,661)$
Beginning of year budget basis encumbrances 1,382,832
End of year budget basis encumbrances (1,506,910)
GAAP basis expenditures and other financing uses 13,664,299$
Budgeted Amounts
For the Year Ended December 31, 2019
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.
78
State's City's and State's City's City's Proportionate Proportionate City's Proportionate Plan FiduciaryProportion Proportionate Share of the Net Share of the Net Share of the Net Net PositionCity Fiscal PERA Fiscal of the Net Share of the Pension Liability Pension Liability City's Pension Liability as a as a PercentageYear End Year End Date Pension Net Pension Associated Associated Covered Percentage of Covered of the totalDate(Measurement Date)LiabilityLiability (a)with City (b)with City (a+b)Payroll ** (c)Payroll ((a+b)/c)Pension Liability12/31/15 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%12/31/18 6/30/18 0.0688% 3,816,742 125,096 3,941,838 4,622,170 85.28% 79.50%12/31/19 6/30/19 0.0701% 3,875,672 120,495 3,996,167 4,937,666 80.93% 80.20%* 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."Contributions inRelation to the ContributionsCity Fiscal PERA Fiscal Statutorily Statutorily Contribution as a PercentageYear End Year End Date Required Required Deficiency Covered of CoveredDate(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%12/31/18 6/30/18 356,724 356,724 - 4,756,318 7.50%12/31/19 6/30/19 397,839 397,839 - 5,303,999 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 ROSEMOUNTSCHEDULE OF CITY'S AND NONEMPLOYER PROPORTIONATE SHARE OF THE NET PENSION LIABILITY - PUBLIC EMPLOYEES GENERAL EMPLOYEES RETIREMENT FUNDFor the Year Ended December 31, 2019For the Year Ended December 31, 2019 PUBLIC EMPLOYEES GENERAL EMPLOYEES RETIREMENT FUNDSCHEDULE 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.79
City's City's City's Proportionate Plan FiduciaryProportion Proportionate Share of the Net PositionCity Fiscal PERA Fiscal of the Net Share of the City's Net Pension Liability as a PercentageYear End Year End Date Pension Net Pension Covered as a Percentage of of the totalDate(Measurement Date)LiabilityLiability (a)Payroll ** (b)Covered Payroll (a/b)Pension Liability12/31/15 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%12/31/18 6/30/18 0.2179% 2,322,590 2,297,620 101.09% 88.80%12/31/19 6/30/19 0.2255% 2,400,675 2,381,224 100.82% 89.30%* 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 inRelation to the ContributionsCity Fiscal PERA Fiscal Statutorily Statutorily Contribution as a PercentageYear End Year End Date Required Required Deficiency Covered of CoveredDate(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%12/31/18 6/30/18 384,894 384,894 - 2,375,890 16.20%12/31/19 6/30/19 418,417 418,417 - 2,468,538 16.95%* 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, 2019PUBLIC EMPLOYEES POLICE AND FIRE FUNDREQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)CITY OF ROSEMOUNTSCHEDULE OF CITY'S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY - PUBLIC EMPLOYEES POLICE AND FIRE FUNDFor the Year Ended December 31, 2019SCHEDULE OF EMPLOYER CONTRIBUTIONS - See auditors' report and accompanying notes to required supplementary information.80
City's Year End 2015 City's Year End 2016 City's Year End 2017 City's Year End 2018 City's Year End 2019Measurement Date 2014Measurement Date 2015Measurement Date 2016Measurement Date 2017Measurement Date 2018Total Pension Liability Service cost113,354$ 116,471$ 133,433$ 136,040$ 141,612$ Interest 125,956 137,850 148,293 167,555 164,841 Changes of assumptions - 32,190 (68,607) - 57,836 Differences between expected and actual experience - - (76,515) - (133,406) Changes of benefit terms - 22,230 52,512 24,100 62,194 Benefit payments, including member contribution refunds- (88,394) - (576,871) (170,088) Net change in total pension liability 239,310 220,347 189,116 (249,176) 122,989 Total pension liability - beginning1,985,922 2,225,232 2,445,579 2,634,695 2,385,519 Total pension liability - ending2,225,232$ 2,445,579$ 2,634,695$ 2,385,519$ 2,508,508$ Plan Fiduciary Net Position Contributions - State and local296,595$ 244,269$ 170,901$ 170,267$ 180,579$ Contributions - donations and other - - 277 - - Net investment income 186,351 (44,297) 271,652 502,429 (147,171) Benefit payments, including member contribution refunds - (88,394) - (576,871) (170,088) Administrative costs(8,300) (13,285) (8,570) (8,500) (8,805) Net change in plan fiduciary net position 474,646 98,293 434,260 87,325 (145,485) Plan fiduciary net position - beginning2,874,130 3,348,776 3,447,069 3,881,329 3,968,654 Plan fiduciary net position - ending3,348,776$ 3,447,069$ 3,881,329$ 3,968,654$ 3,823,169$ Net pension liability/(asset) - ending(1,123,544)$ (1,001,490)$ (1,246,634)$ (1,583,135)$ (1,314,661)$ Plan fiduciary net position as a percentage of the total pension liability 150.49% 140.95% 147.32% 166.36% 152.41%* This schedule is provided prospectively beginning with the fiscal Year Ended December 31, 2015.CITY OF ROSEMOUNTSCHEDULE OF CHANGES IN THE ROSEMOUNT FIRE DEPARTMENT RELIEF ASSOCIATION'SNET PENSION ASSET AND RELATED RATIOS REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)For the Year Ended December 31, 2019See auditors' report and accompanying notes to required supplementary information.81
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
12/31/18 - 30,000 30,000 150,579
12/31/19 - 30,000 30,000 149,583
* 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, 2019
CITY OF ROSEMOUNT
SCHEDULE OF EMPLOYER CONTRIBUTIONS -
See auditors' report and accompanying notes to required supplementary information.
82
City's Year End 2018 City's Year End 2019
Measurement Date 2017 Measurement Date 2018
Total OPEB Liability
Service cost 59,324$ 68,385$
Interest 29,170 28,211
Changes of assumptions 32,417 (28,245)
Benefit payments (41,850) (44,738)
Net change in total OPEB liability 79,061 23,613
Total OPEB liability - beginning 727,226 806,287
Total OPEB liability - ending 806,287$ 829,900$
Plan Fiduciary Net Position
Contributions - Employer 41,850$ 44,738$
Benefit payments (41,850) (44,738)
Net change in plan fiduciary net position - -
Plan fiduciary net position - beginning - -
Plan fiduciary net position - ending -$ -$
Net OPEB liability - ending 806,287$ 829,900$
Plan fiduciary net position as a
percentage of the total OPEB liability 0.00% 0.00%
OPEB-eligible payroll for the measurement period 6,514,100$ 7,102,494$
Net OPEB Liability as a % of eligible payroll 12.4% 11.7%
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2018.
For the Year Ended December 31, 2019
CITY OF ROSEMOUNT
SCHEDULE OF CHANGES IN THE CITY'S
TOTAL OPEB LIABILITY AND RELATED RATIOS
REQUIRED SUPPLEMENTARY INFORMATION (Last Ten Years*)
See auditors' report and accompanying notes to required supplementary information.
83
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2019
84
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.
2019 General Employees Fund Changes
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions:
The employer supplemental contribution was changed prospectively, decreasing from $31 million
to $21 million per year. The State’s special funding contribution was changed prospectively,
requiring $16 million due per year through 2031.
2018 General Employees Fund Changes:
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.00 percent per year through 2044 and
2.50 percent per year thereafter to 1.25 percent per year.
Changes in Plan Provisions:
The augmentation adjustment in early retirement factors is eliminated over a five-year period
starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024.
Interest credited on member contributions decreased from 4.0 percent to 3.0 percent, beginning
July 1, 2018.
Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that
has already accrued for deferred members will still apply.
Contribution stabilizer provisions were repealed.
Post-retirement benefit increases were changed from 1.0 percent per year with a provision to
increase to 2.5 percent upon attainment of 90 percent funding ratio to 50 percent of the Social
Security Cost of Living Adjustment, not less than 1.0 percent and not more than 1.5 percent,
beginning January 1, 2019.
For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree
reaches Normal Retirement Age. Does not apply to Rule of 90 retirees, disability benefit recipients,
or survivors.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2019
85
Public Employees Retirement Association (PERA) (cont.)
2018 General Employees Fund Changes (cont.):
Changes in Plan Provisions (cont.):
Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
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.
Changes in Plan Provisions:
The State’s contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in
2017 and 2018, and $6,000,000 thereafter.
The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund
changed from $21,000,000 to $31,000,000 in calendar years 2019 to 2031. The State’s
contribution changed from $16,000,000 to $6,000,000 in calendar years 2019 to 2031.
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.
2015 General Employees Fund Changes:
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.
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; the State’s contribution of $6 million, which meets the special funding
situation definition, was due September 2015.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2019
86
Public Employees Retirement Association (PERA) (cont.)
2019 Police and Fire Fund Changes
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
2018 Police and Fire Fund Changes:
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2016 to MP-2017.
Changes in Plan Provisions:
Post-retirement benefit increases were changed to 1.0 percent for all years, with no trigger.
An end date of July 1, 2048 was added to the existing $9.0 million state contribution.
New annual state aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million
thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier.
Member contributions were changed from 10.8 percent to 11.3 percent of pay, effective January
1, 2019 and 11.8 percent of pay, effective January 1, 2020.
Employer contributions were changed from 16.20 percent to 16.95 percent of pay, effective
January 1, 2019 and 17.70 percent of pay, effective January 1, 2020.
Interest credited on member contributions decreased from 4.0 percent to 3.0 percent, beginning
July 1, 2018.
Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation
that has already accrued for deferred members will still apply.
Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
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.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2019
87
Public Employees Retirement Association (PERA) (cont.)
2017 Police and Fire Fund Changes (cont.):
Changes in Actuarial Assumptions (cont.):
Assumed percentage of married female members was decreased from 65 percent to 60 percent.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
The assumed percentage of female members electing joint and survivor annuities was increased.
The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years
to 1.00 percent per year through 2064, and 2.50 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 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.
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.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2019
88
Rosemount Fire Department Relief Association-Defined Benefit Pension Plan
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.
2019 Changes:
Changes in Plan Provisions:
The lump sum benefit increased from $7,200 to $7,300 per year.
Changes in Actuarial Assumptions (cont.):
The expected investment return and discount rate decreased from 6.75% to 6.00% to reflect
updated capital market assumptions.
The mortality, withdrawal, and disability assumptions were updated from the rates used in the July
1, 2016 Minnesota PERA Police & Fire Plan actuarial valuation.
The inflation assumption was updated from 2.75% to 2.50%.
2018 Changes:
Changes in Plan Provisions:
The lump sum benefit increased from $7,100 to $7,200 per year.
2017 Changes:
Changes in Plan Provisions:
The lump sum benefit increased from $7,000 to $7,100 per year.
Changes in Actuarial Assumptions:
The expected investment return and discount rate increased from 5.75% to 6.75% to reflect
updated capital market assumptions.
2016 Changes:
Changes in Plan Provisions:
The lump sum benefit increased from $6,900 to $7,000 per year.
Changes in Actuarial Assumptions:
The discount rate was updated from 6.00% to 5.75%.
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
As of and for the Year Ended December 31, 2019
89
Other Post Employment Benefit (OPEB) Plan
The City implemented GASB Statement No. 75 in fiscal year 2018. Information prior to fiscal year 2018 is
not available.
The City is required to present the last ten fiscal years of data; however, accounting standards allow the
presentation of as many years as are available until ten fiscal years are presented.
Accumulation of assets:
No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement No. 75.
Changes in benefit terms: There were no changes of benefit terms.
2019 Changes:
Changes in Valuation Assumptions:
The discount rate changed from 3.31% in 2018 to 3.71% in 2019.
2018 Changes:
Changes in Valuation Assumptions:
The discount rate changed from 3.78% in 2017 to 3.31% in 2018.
S U P P L E M E N T A R Y I N F O R M A T I O N
Total
Fire Nonmajor
Safety Port Authority Governmental
PEG Fees Education GIS General Funds
ASSETS
Cash and investments 69,340$ 3,720$ 67,085$ 449,124$ 589,269$
Receivables from:
Accounts 7,596 - - - 7,596
Prepaid items - - - 529 529
TOTAL ASSETS 76,936$ 3,720$ 67,085$ 449,653$ 597,394$
LIABILITIES
Accounts payable -$ -$ -$ 2,827$ 2,827$
FUND BALANCES
Nonspendable - - - 529 529
Restricted 76,936 - - - 76,936
Committed - 3,720 67,085 446,297 517,102
Total Fund Balances 76,936 3,720 67,085 446,826 594,567
TOTAL LIABILITIES AND
FUND BALANCES 76,936$ 3,720$ 67,085$ 449,653$ 597,394$
CITY OF ROSEMOUNT
COMBINING BALANCE SHEET - NONMAJOR GOVERNMENTAL FUNDS
As of December 31, 2019
Special Revenue Funds
90
Total
Fire Nonmajor
Safety Port Authority Governmental
PEG Fees Education GIS General Funds
REVENUES
Taxes 31,436$ -$ -$ 105,000$ 136,436$
Public charges for services - - 9,300 8,425 17,725
Miscellaneous 413 330 484 2,689 3,916
Total Revenues 31,849 330 9,784 116,114 158,077
EXPENDITURES
Current
Public works - - 4,317 - 4,317
Culture, education and recreation 1,878 - - - 1,878
Conservation and development - - - 96,229 96,229
Capital Outlay - - - 332 332
Total Expenditures 1,878 - 4,317 96,561 102,756
Excess (deficiency) of revenues over expenditures 29,971 330 5,467 19,553 55,321
OTHER FINANCING SOURCES
Sale of capital assets - - - 268,114 268,114
Net change in fund balance 29,971 330 5,467 287,667 323,435
FUND BALANCES - Beginning of Year 46,965 3,390 61,618 159,159 271,132
FUND BALANCES - END OF YEAR 76,936$ 3,720$ 67,085$ 446,826$ 594,567$
For the Year Ended December 31, 2019
Special Revenue Funds
CITY OF ROSEMOUNT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - NONMAJOR GOVERNMENTAL FUNDS
91
Original and
Final Budgeted Variance with
Amounts Actual Final Budget
REVENUES
Intergovernmental -$ 423,123$ 423,123$
Public charges for services 1,000,000 1,631,720 631,720
Interest earnings 25,000 76,020 51,020
Total Revenues 1,025,000 2,130,863 1,105,863
EXPENDITURES
Current
General government 2,500 2,500 -
Capital Outlay 520,000 1,361,503 (841,503)
Total Expenditures 522,500 1,364,003 (841,503)
Excess of revenues over expenditures 502,500 766,860 264,360
OTHER FINANCING SOURCES
Transfers in - 169,000 169,000
Net Change in Fund Balance 502,500 935,860 433,360
FUND BALANCE - Beginning (188,234) (188,234) -
FUND BALANCE - ENDING 314,266$ 747,626$ 433,360$
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
CITY OF ROSEMOUNT
For the Year Ended December 31, 2019
IN FUND BALANCE (BUDGETARY BASIS) - BUDGET AND ACTUAL
BUILDING CIP CAPITAL PROJECT SUB-FUND
92
Original and
Final Budgeted Variance with
Amounts Actual Final Budget
REVENUES
Taxes 852,327$ 852,327$ -$
Intergovernmental 2,150,000 - (2,150,000)
Public charges for services 125,000 125,000 -
Special assessments 150,000 329,192 179,192
Interest earnings 21,000 130,015 109,015
Total Revenues 3,298,327 1,436,534 (1,861,793)
EXPENDITURES
Current
General government 2,500 2,500 -
Capital Outlay 3,712,500 123,812 3,588,688
Total Expenditures 3,715,000 126,312 3,588,688
Excess (deficiency) of revenues over expenditures (416,673) 1,310,222 1,726,895
OTHER FINANCING SOURCES (USES)
Transfers in - 68,182 68,182
Transfers out - (1,226,004) (1,226,004)
Total Other Financing Sources (Uses) - (1,157,822) (1,157,822)
Net Change in Fund Balance (416,673) 152,400 569,073
FUND BALANCE - Beginning 3,585,898 3,585,898 -
FUND BALANCE - ENDING 3,169,225$ 3,738,298$ 569,073$
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
CITY OF ROSEMOUNT
For the Year Ended December 31, 2019
IN FUND BALANCE (BUDGETARY BASIS) - BUDGET AND ACTUAL
STREET CIP CAPITAL PROJECT SUB-FUND
93
Original and
Final Budgeted Variance with
Amounts Actual Final Budget
REVENUES
Taxes 620,000$ 620,000$ -$
Interest earnings 10,500 30,030 19,530
Miscellaneous - 1,589 1,589
Total Revenues 630,500 651,619 21,119
EXPENDITURES
Current
General government 2,500 2,500 -
Capital Outlay 879,656 874,515 5,141
Debt Service:
Principal retirement - 122,033 (122,033)
Interest and fiscal charges - 14,440 (14,440)
Total Expenditures 882,156 1,013,488 (131,332)
Excess (deficiency) of revenues over expenditures (251,656) (361,869) (110,213)
OTHER FINANCING SOURCES
Lease issuance - 166,131 166,131
Sale of capital assets 53,500 1,789 (51,711)
Total Other Financing Sources 53,500 167,920 114,420
Net Change in Fund Balance (198,156) (193,949) 4,207
FUND BALANCE - Beginning 632,510 632,510 -
FUND BALANCE - ENDING 434,354$ 438,561$ 4,207$
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
CITY OF ROSEMOUNT
For the Year Ended December 31, 2019
IN FUND BALANCE (BUDGETARY BASIS) - BUDGET AND ACTUAL
EQUIPMENT CIP CAPITAL PROJECT SUB-FUND
94
STATISTICAL SECTION (Unaudited)
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 Schedule No.
FINANCIAL TRENDS 1-4
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 5-8
These schedules contain information to help the reader assess the government’s
most significant local revenue source, the property tax.
DEBT CAPACITY 9-13
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 14-15
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 16-18
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 reports for
the relevant year.
Schedule 1City of RosemountNet Position by ComponentLast Ten Fiscal Years(Accrual Basis of Accounting)2010201120122013201420152016201720182019Governmental activities Net investment in capital assets 49,563,765$ 53,419,036$ 54,828,890$ 57,746,938$ 58,438,402$ 64,684,403$ 69,942,544$ 74,294,033$ 80,094,490$ 85,993,734$ Restricted (1) 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 6,478,370 4,863,958 Restricted donations for future construction - - - - 1,988,610 1,589,000 - - - - Restricted for pensions - - - - - 1,123,544 1,001,490 1,246,634 1,583,135 1,314,661 Restricted for PEG fees - - - - - - - 21,759 46,965 76,936 Unrestricted 14,089,305 16,772,383 15,970,416 15,883,105 17,913,535 13,031,913 13,100,682 14,090,028 14,596,678 18,205,045 Total governmental activities net position 69,014,745 75,956,211 77,407,860 80,778,817 86,050,450 87,354,457 90,156,291 95,535,783 102,799,638 110,454,334 Business-type activities Net investment in capital assets 89,025,234$ 90,695,202$ 93,501,405$ 95,770,585$ 98,194,408$ 96,808,557$ 98,722,624$ $97,328,281 97,977,645$ 98,007,299$ Unrestricted 20,059,049 17,772,742 19,247,600 18,591,663 19,348,437 20,376,753 21,739,120 23,521,090 26,994,489 28,881,892 Total business-type activities net position 109,084,283 108,467,944 112,749,005 114,362,248 117,542,845 117,185,310 120,461,744 120,849,371 124,972,134 126,889,191 Primary government Net investment in capital assets 138,588,999$ 144,114,238$ 148,330,295$ 153,517,523$ 156,632,810$ 161,492,960$ 168,665,168$ 171,622,314$ 178,072,135$ 184,001,033$ Restricted (1) 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 6,478,370 4,863,958 Restricted donations for future construction - - - - 1,988,610 1,589,000 - - - - Restricted for pension - - - - - 1,123,544 1,001,490 1,246,634 1,583,135 1,314,661 Restricted for PEG fees - - - - - - - 21,759 46,965 76,936 Unrestricted 34,148,354 34,545,125 35,218,016 34,474,768 37,261,972 33,408,666 34,839,802 37,611,118 41,591,167 47,086,937 Total primary government net position 178,099,028$ 184,424,155$ 190,156,865$ 195,141,065$ 203,593,295$ 204,539,767$ 210,618,035$ 216,385,154$ 227,771,772$ 237,343,525$ (1) Prior to 2014 "Restricted" was included in one summary line.Source: City of Rosemount Comprehensive Annual Financial Reports Fiscal Years95
Schedule 2City of RosemountChanges in Net PositionLast Ten Fiscal Years(Accrual Basis of Accounting)2010201120122013201420152016201720182019ExpensesGovernmental activities General government2,671,886$ 2,612,911$ 2,701,234$ 2,583,271$ 2,961,500$ 2,878,070$ 4,426,817$ 3,859,090$ 3,605,197$ 3,826,860$ Public safety 3,819,520 3,763,742 3,872,633 4,051,642 4,233,610 4,378,347 5,629,866 5,170,637 5,235,993 5,332,313 Public works 4,326,903 4,336,345 4,341,203 5,448,047 5,764,176 4,468,049 4,765,115 5,822,738 5,163,908 5,692,171 Culture, education and recreation 1,477,525 1,496,068 2,405,676 1,586,449 1,613,600 1,643,886 1,959,224 2,042,299 2,119,418 2,217,403 Conservation and economic development149,701 9,069 - 3,267 1,032,304 53,040 3,968 4,315 61,637 56,611 Interest and fiscal charges 690,896 637,609 541,386 517,067 501,682 569,722 476,121 308,567 295,431 281,999 Total governmental activities expenses 13,136,431 12,855,744 13,862,132 14,189,743 16,106,872 13,991,114 17,261,111 17,207,646 16,481,584 17,407,357 Business-Type activities Water Utility 1,861,467 1,792,613 1,827,543 1,903,275 1,962,833 2,219,781 2,075,460 2,175,626 2,156,694 2,845,741 Sewer Utility 2,305,503 2,386,660 2,317,324 2,425,486 2,522,913 2,575,330 2,742,402 2,837,550 3,029,482 3,053,021 Storm Water Utility 1,010,678 950,114 968,935 989,574 1,122,839 1,117,526 1,228,697 1,275,073 1,330,580 1,732,753 Arena 484,278 479,707 498,118 578,345 493,943 497,838 510,968 484,903 659,827 550,487 Total Business-Type activities expenses 5,661,926 5,609,094 5,611,920 5,896,680 6,102,528 6,410,475 6,557,527 6,773,152 7,176,583 8,182,002 Total primary government expenses18,798,357$ 18,464,838$ 19,474,052$ 20,086,423$ 22,209,400$ 20,401,589$ 23,818,638$ 23,980,798$ 23,658,167$ 25,589,359$ Program RevenuesGovernmental activities Charges for services General government1,672,014$ 1,881,337$ 2,286,892$ 2,465,695$ 3,202,744$ 3,182,769$ 3,128,969$ 3,286,273$ 4,226,249$ 3,915,953$ Public safety 151,802 169,718 184,011 139,432 146,973 151,168 150,571 134,893 136,077 149,992 Public works 20,912 68,166 45,564 53,813 59,417 99,060 54,893 100,038 107,057 153,036 Culture, education and recreation 263,238 272,958 365,486 342,100 571,222 728,567 392,102 779,541 1,321,699 1,151,077 Operating grants and contributions General government- - 46,326 - - - 20,631 1,509 - - Public safety 246,346 249,515 275,114 263,805 283,095 406,657 547,505 366,654 384,207 418,138 Public works 311,630 108,640 53,198 32,790 53,515 41,235 41,235 42,495 42,960 300,431 Culture, education and recreation 26,484 33,499 1,275 6,241 3,736 7,347 2,617 1,337 3,326 410 Conservation and economic development20,100 67,400 - 20,635 22,536 23,000 24,000 25,000 30,263 30,263 Capital grants and contributions General government- - - - 1,988,610 - - - - - Public safety 697 - - - 18,131 - 3,918 6,358 16,632 11,846 Public works 5,320,892 4,214,641 3,628,190 3,967,849 4,318,692 1,650,864 3,170,374 3,538,480 4,819,520 3,925,601 Culture, education and recreation 9,218 - - - - - 419 293 250,973 2,777 Conservation and economic development19,425 - 39,352 322,808 740,660 287,090 7,000 33,629 600 1,200 Total governmental activities program revenues 8,062,758 7,065,874 6,925,408 7,615,168 11,409,331 6,577,757 7,544,234 8,316,500 11,339,563 10,060,724 Fiscal Years96
Schedule 2 (continued)City of RosemountChanges in Net PositionLast Ten Fiscal Years(Accrual Basis of Accounting)2010201120122013201420152016201720182019Business-Type activities Charges for services Water Utility 1,952,359 1,983,264 2,406,557 2,167,709 2,379,147 2,552,123 2,692,740 3,041,642 3,567,275 3,301,002 Sewer Utility 1,470,801 1,470,626 1,707,730 1,716,022 1,733,646 1,873,687 1,996,130 2,126,771 2,351,986 2,425,548 Storm Water Utility 888,995 927,429 1,135,067 1,061,632 1,350,259 1,544,158 1,387,817 1,693,845 1,981,312 1,757,747 Arena 406,797 378,046 352,930 376,058 392,631 408,874 430,103 441,059 448,445 437,842 Operating grants and contributions Water Utility - - - - 9,901 - 24,248 84,042 58,411 720 Sewer Utility - - - - - - - - - 712 Storm Water Utility - - - - 19,680 - - - - 2,521 Arena - - - - - - - - - 314 Capital grants and contributions Water Utility 72,960 243,835 168,573 371,582 180,568 75,622 1,041,806 216,454 402,788 635,944 Sewer Utility 71,656 110,538 207,422 83,484 98,863 85,848 1,153,536 204,114 417,279 483,220 Storm Water Utility 85,242 190,022 487,082 648,297 193,402 42,708 989,073 210,802 525,305 1,012,992 Total Business-Type activities program revenues 4,948,810 5,303,760 6,465,361 6,424,784 6,358,097 6,583,020 9,715,453 8,018,729 9,752,801 10,058,562 Total primary government program revenues13,011,568 12,369,634 13,390,769 14,039,952 17,767,428 13,160,777 17,259,687 16,335,229 21,092,364 20,119,286 Net (Expense) RevenueGovernmental activities (5,073,673) (5,789,870) (6,936,724) (6,574,575) (4,697,541) (7,413,357) (9,716,877) (8,891,146) (5,142,021) (7,346,633) Business-Type activities (713,116) (305,334) 853,441 528,104 255,569 172,545 3,157,926 1,245,577 2,576,218 1,876,560 Total primary government net expense(5,786,789)$ (6,095,204)$ (6,083,283)$ (6,046,471)$ (4,441,972)$ (7,240,812)$ (6,558,951)$ (7,645,569)$ (2,565,803)$ (5,470,073)$ General Revenues and Other Changes in Net PositionGovernmental activities Property taxes, levied for general purposes 10,023,255$ 10,266,170$ 10,001,071$ 10,123,158$ 10,328,709$ 10,479,883$ 10,709,952$ 11,139,036$ 11,520,992$ 12,005,548$ Property taxes, levied for debt service 1,257,365 936,054 1,038,404 1,037,524 1,022,258 1,094,210 1,142,142 1,178,589 1,207,786 1,147,983 Other taxes 264,808 262,783 242,491 259,064 288,425 332,290 354,571 366,745 400,551 411,423 Investment income 164,474 243,193 136,310 121,886 221,243 181,754 270,676 307,497 391,991 547,947 Change in fair value of investments n/a n/a n/a (458,073) 319,644 (1,788) (147,945) (20,104) (63,299) 119,787 Gain (loss) on the sale of assets - 130,114 13,248 12,883 - 7,328 - - - 33,783 Miscellaneous 429,150 204,149 127,617 116,123 103,615 104,237 103,394 171,294 89,672 79,694 Transfers 984,000 688,873 (3,170,768) (1,267,033) (2,314,720) (31,534) 85,921 1,127,581 (1,141,817) 655,164 Total governmental activities 13,123,052 12,731,336 8,388,373 9,945,532 9,969,174 12,166,380 12,518,711 14,270,638 12,405,876 15,001,329 Business-Type activities Investment income 315,928 377,868 256,852 209,227 333,929 272,336 339,012 295,867 438,095 628,194 Change in fair value of investments n/a n/a n/a (391,121) 276,379 (24,638) (134,583) (26,236) (33,367) 67,467 Transfers (984,000) (688,873) 3,170,768 1,267,033 2,314,720 31,534 (85,921) (1,127,581) 1,141,817 (655,164) Total Business-Type activities (668,072) (311,005) 3,427,620 1,085,139 2,925,028 279,232 118,508 (857,950) 1,546,545 40,497 Total primary government 12,454,980 12,420,331 11,815,993 11,030,671 12,894,202 12,445,612 12,637,219 13,412,688 13,952,421 15,041,826 Change in Net PositionGovernmental activities 8,049,379 6,941,466 1,451,649 3,370,957 5,271,633 4,753,023 2,801,834 5,379,492 7,263,855 7,654,696 Business-Type activities (1,381,188) (616,339) 4,281,061 1,613,243 3,180,597 451,777 3,276,434 387,627 4,122,763 1,917,057 Total primary government 6,668,191$ 6,325,127$ 5,732,710$ 4,984,200$ 8,452,230$ 5,204,800$ 6,078,268$ 5,767,119$ 11,386,618$ 9,571,753$ Source: City of Rosemount Comprehensive Annual Financial Reportsn/a - Not Available Fiscal Years97
Schedule 3City of RosemountFund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)2010201120122013201420152016201720182019General Fund Reserved for Prepaid items 33,280$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Encumbrances 465,544 - - - - - - - - - Unreserved Designated 6,653,352 - - - - - - - - - Undesignated 32,941 - - - - - - - - - Nonspendable- 85,067 80,623 67,266 66,238 69,348 - - 33,484 - Assigned - 1,894,348 2,319,433 2,292,257 2,808,794 2,981,632 2,969,701 2,222,507 2,458,337 2,665,850 Unassigned- 5,700,071 5,905,056 6,001,628 6,288,615 6,506,697 6,918,833 7,333,743 7,503,588 7,893,190 Total General Fund7,185,117 7,679,486 8,305,112 8,361,151 9,163,647 9,557,677 9,888,534 9,556,250 9,995,409 10,559,040 All Other Governmental Funds Reserved for Debt service 6,173,964 - - - - - - - - - Capital projects funds - encumbrances1,061,526 - - - - - - - - - Unreserved Designated Capital projects funds 3,510,512 - - - - - - - - - Special revenue funds 6,900 - - - - - - - - - Undesignated Port Authority TIF fund 429,284 - - - - - - - - - Special revenue funds 134,919 - - - - - - - - - Nonspendable for Capital projects funds - - 10,000 10,000 10,000 10,000 10,000 - - - Nonmajor governmental funds- - - - 549 606 113 444 548 529 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 3,209,605 2,449,174 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 2,119,361 2,395,413 Nonmajor governmental funds- - - - - - - 21,759 46,965 76,936 Committed for Nonmajor governmental funds- 159,048 191,307 214,031 290,834 190,941 181,276 230,162 223,619 517,102 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 11,300,057 13,856,932 Total All Other Governmental Funds11,317,105 14,133,667 11,512,158 12,068,635 15,618,361 18,505,560 17,890,411 15,889,193 16,900,155 19,296,086 Total All Funds18,502,222$ 21,813,153$ 19,817,270$ 20,429,786$ 24,782,008$ 28,063,237$ 27,778,945$ 25,445,443$ 26,895,564$ 29,855,126$ Source: City of Rosemount Comprehensive Annual Financial ReportsNote: Beginning in 2011, the categories of fund balance changed with the implementation of GASB statement No. 54 Fiscal Years98
Schedule 4City of RosemountChanges in Fund Balances, Governmental FundsLast Ten Fiscal Years(Modified Accrual Basis of Accounting)2010201120122013201420152016201720182019Revenues Taxes 10,822,174$ 10,643,333$ 10,376,939$ 10,514,617$ 10,747,756$ 10,940,420$ 11,167,397$ 11,591,837$ 11,986,223$ 12,319,478$ Tax increments 448,253 576,675 660,056 660,130 646,636 720,963 794,268 832,533 863,105 865,476 Intergovernmental 4,051,643 2,394,400 584,381 2,288,281 2,509,924 882,930 674,220 1,216,200 1,570,847 3,130,311 Public charges for services1,540,191 2,226,976 2,277,051 2,370,562 3,132,556 3,352,219 2,826,231 3,457,253 4,811,376 4,309,059 Licenses and permits453,900 388,615 484,644 522,131 730,765 694,765 792,557 741,243 884,165 925,938 Fines and forfeitures122,394 124,324 129,343 106,617 116,384 114,580 108,561 101,327 94,281 109,083 Special assessments 832,686 496,386 2,155,618 1,539,059 2,123,199 2,368,403 1,035,044 718,051 1,895,665 639,203 Investment income and miscellaneous1,224,178 1,552,188 1,773,249 650,402 3,135,395 1,240,234 508,130 1,546,665 1,886,005 1,966,868 Total revenues19,495,419 18,402,897 18,441,281 18,651,799 23,142,615 20,314,514 17,906,408 20,205,109 23,991,667 24,265,416 Expenditures General government2,368,489 2,382,663 2,569,649 2,506,529 2,752,153 2,841,775 2,977,518 3,253,808 3,141,886 3,263,349 Public safety3,366,500 3,436,225 3,510,222 3,632,212 3,762,826 4,014,411 4,072,189 4,306,808 4,651,700 4,702,502 Public works 2,805,767 3,078,059 3,032,940 3,285,257 3,192,487 2,957,952 3,005,419 4,395,373 3,125,886 3,825,266 Parks and recreation 1,239,742 1,239,857 1,271,513 1,321,946 1,304,867 1,298,271 1,516,720 1,546,723 1,663,618 1,752,993 Conservation and development139,965 - - - 376,496 - - - 73,383 96,229 Capital Outlay7,808,264 6,185,959 8,096,866 7,628,944 9,470,432 6,831,658 5,087,107 5,422,617 9,276,566 7,112,935 Debt Service Principal retirement1,840,000 2,225,000 2,405,000 1,545,000 1,580,000 3,470,000 2,165,000 2,240,000 1,426,727 1,567,033 Interest and fiscal charges726,878 677,469 582,377 511,526 508,605 573,607 495,638 384,544 337,407 324,042 Total expenditures20,295,605 19,225,232 21,468,567 20,431,414 22,947,866 21,987,674 19,319,591 21,549,873 23,697,173 22,644,349 Excess (deficiency) of revenues over (under) expenditures(800,186) (822,335) (3,027,286) (1,779,615) 194,749 (1,673,160) (1,413,183) (1,344,764) 294,494 1,621,067 Other financing sources (uses) Issuance of long-term debt1,355,000 2,080,000 810,000 1,500,000 2,400,000 4,680,000 - 1,055,000 835,000 - Payment to escrow agent- - - - - - - (3,275,000) - - Premium on long-term debt- - - - - 180,637 - 61,287 83,871 - Lease issuance- - - - - - - - 276,848 166,131 Sale of capital assets12,505 10,121 12,740 3,627 348,335 69,578 407,581 42,394 68,130 269,903 Transfers in 3,089,286 2,847,900 348,663 1,330,491 1,908,755 1,008,983 851,403 1,743,745 226,703 1,273,584 Transfers out(2,778,822) (804,755) (140,000) (441,987) (499,617) (984,809) (130,093) (616,164) (334,925) (371,123) Total other financing sources (uses)1,677,969 4,133,266 1,031,403 2,392,131 4,157,473 4,954,389 1,128,891 (988,738) 1,155,627 1,338,495 Net change in fund balances877,783 3,310,931 (1,995,883) 612,516 4,352,222 3,281,229 (284,292) (2,333,502) 1,450,121 2,959,562 Fund balances - Beginning17,624,439 18,502,222 21,813,153 19,817,270 20,429,786 24,782,008 28,063,237 27,778,945 25,445,443 26,895,564 Fund balances - Ending18,502,222$ 21,813,153$ 19,817,270$ 20,429,786$ 24,782,008$ 28,063,237$ 27,778,945$ 25,445,443$ 26,895,564$ 29,855,126$ Debt service as a percentage of noncapital expenditures20.1% 22.0% 22.3% 16.1% 15.5% 26.7% 18.7% 16.3% 12.2% 12.2%Source: City of Rosemount Comprehensive Annual Financial Reports Fiscal Years99
Schedule 5City of RosemountAssessed Value (or Tax Capacity) and Estimated Market Value of All Taxable PropertyLast Ten Fiscal YearsTotalTaxCapacityas % ofLocal TaxEstimated Local TaxEstimated Local TaxEstimated CityEstimated State TaxNet TaxMarket Net TaxMarket Net TaxMarket TaxMarket Net TaxPay-YearCapacity (1)ValueCapacity (1)ValueCapacity (1)ValueRate (2)ValueCapacity (1)201025,067,278$ 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 2018 28,461,255 2,533,539,603 1,098,545 55,561,924 29,559,800 2,589,101,527 40.961 1.14% 6,995,647 2019 30,580,651 2,724,354,762 1,142,238 57,687,563 31,722,889 2,782,042,325 39.3551.14% 7,413,571 Source: Dakota County Assessor's Office, Usage Classification Report - Real Estate and Personal PropertiesNote: 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 largereductions in the Estimated Market Values and the Net Tax Capacity Values(2) Rates taken from Schedule 6Real PropertyPersonal PropertyTotal1.12%1.13%1.14%1.15%1.16%1.17%1.18%2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Total Tax Capacity as % ofEstimated Market ValueTotal %100
Schedule 6ISD 196 ISD 199 ISD 200 Dakota TotalsCity MarketSchool Market School Market School Market CountySchool School SchoolYearReferendum District Referendum District Referendum District Referendum Dakota Referendum Special District District DistrictCollectible CityRates (1) No. 196 Rates (1) No. 199 Rates (1) No. 200 Rates (1) CountyRates (1) Districts No. 196 No. 199 No. 2002010 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 95.8202011 44.661 0.00697 26.959 0.22601 24.679 0.15606 22.140 0.26626 29.149 0.00537 5.199 105.968 103.688 101.1492012 46.994 n/a 28.440 0.22131 28.363 0.16428 25.435 0.28618 31.426 0.00551 5.562 112.422 112.345 109.4172013 48.862 n/a 27.956 0.23542 27.556 0.18354 23.932 0.29483 33.421 n/a 5.884 116.123 115.723 112.0992014 47.676 n/a 27.606 0.25809 33.418 0.15657 23.052 0.26005 31.827 n/a 5.538 112.647 118.459 108.0932015 45.152 n/a 23.271 0.25484 34.864 0.16151 20.965 0.25310 29.633 n/a 5.033 103.089 114.682 100.7832016 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 97.7202017 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 95.0482018 40.961 n/a 21.352 0.26715 26.680 0.17143 20.545 0.27360 26.580 n/a 4.307 93.200 98.528 92.3932019 39.355 n/a 20.613 0.26162 26.537 0.13282 19.079 0.26713 25.386 n/a 4.227 89.581 95.505 88.047Source: Dakota County Treasurer-AuditorNote: 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 for these market valued levies is included for the applicable entity for thelife 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 RosemountProperty Tax Rates - All Direct and Overlapping Governmental UnitsLast Ten Fiscal Years101
2019 2010
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)3,430,293$ 1 10.81% 1,264,053$ 2 4.93%
Great Northern Oil Company (2009 - Koch Refining)- 1,621,464 1 6.33%
Northern States Power Co. 384,562 2 1.21% 282,944 3 1.10%
Dakota Aggregates 197,270 3 0.62% -
Northern Natural Gas Co. 194,728 4 0.61% 116,506 6 0.45%
Clarel Corporation (Cub Foods) 188,504 5 0.59% 219,868 4 0.86%
146th Street Partners LP (Waterford Commons) 175,349 6 0.55% -
Minnesota Pipeline Co. 144,761 7 0.46% -
CF Industries Sales LLC (Cenex) 129,414 8 0.41% 88,730 11 0.35%
Minnesota Energy Resources Corp. (MERC)128,608 9 0.41% -
Rosemount Senior Living Associates 124,871 10 0.39% -
Limerick Way LLC 122,092 11 0.38% 81,252 13 0.32%
Hawkins Inc. 109,748 12 0.35% -
Francis & Patricia Dolejs (Celtic Crossing) 94,054 13 0.30% 105,254 7 0.41%
Proto Labs Inc. (2009 - Webb Properties LLC) 93,608 14 0.30% 102,578 8 0.40%
SKB Environmental Inc. 90,614 15 0.29% -
Rosemount Crossing LLC (Aldi's) - 117,916 5 0.46%
Continental Nitrogen & Resources (CNR) - 99,054 9 0.39%
Bigos - Rosemount LLC (Cannon Equipment) - 93,020 10 0.36%
Progress Land Company - 84,738 12 0.33%
Hidden Valley SPE LLC (Rosemount Woods) - 79,310 14 0.31%
Koch Exploration Properties LLC - 49,954 15 0.19%
Principal Taxpayers Total 5,608,476$ 17.68% 4,406,641$ 17.19%
Total City Tax Capacity 31,722,889$ 25,633,368$
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
102
Ratio ofPercent ofDelinquent Total Outstanding Total TaxTotal Tax Current Tax Current TaxesTax Tax Delinquent Collections toYearLevy (1) Collections Collected Collections (2) Collections Taxes Total Tax Levy2010 11,160,169$ 11,059,249$ 99.10% 161,848$ 11,221,097$ -$ 100.00%2011 10,985,813 10,898,846 99.21% 123,066 11,021,912 - 100.00%2012 10,490,554 10,418,211 99.31% 99,300 10,517,511 3,697 99.96%2013 10,750,485 10,667,447 99.23% 84,910 10,752,357 4,290 99.96%2014 11,031,983 10,986,828 99.59% 110,510 11,097,338 1,755 99.98%2015 11,313,577 11,279,075 99.70% 43,833 11,322,908 5,069 99.96%2016 11,465,695 11,417,277 99.58% 53,354 11,470,631 9,722 99.92%2017 11,833,975 11,802,700 99.74% 73,494 11,876,194 13,615 99.88%2018 12,311,425 12,253,448 99.53% 41,449 12,294,897 44,422 99.64%2019 12,730,971 12,667,353 99.50% 22,475 12,689,828 54,173 99.57%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 8City of RosemountProperty Tax Levies and CollectionsLast Ten Fiscal Years103
Schedule 9G.O. and G.O. andG.O. PropertyG.O. TaxRevenue Special Capital TaxIncrement Equipment SupportedAssessment Lease G.O. Capital Total PercentagePopulation Personal Supported Supported Certificates(Port Auth.)Supported Liabilities Revenue Lease Primaryof Personal PerYear(1)Income (1)(2)(2)(2)(2)(2)(3)Bonds (2)Liabilities (3)Government Income Capita2010 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 1,295,980,650 1,416,281 8,905,469 - 855,000 4,150,000 - 2,172,292 - 17,499,042 1.35% 742 2017 24,295 1,400,315,210 1,278,361 5,394,502 - 720,000 3,460,000 - 1,719,063 - 12,571,926 0.90% 517 2018 24,866 1,433,226,508 1,214,313 5,133,535 - 585,000 3,430,000 245,121 1,320,834 30,252 11,959,055 0.83% 481 2019 25,460 1,467,463,480 1,052,413 4,857,569 - 445,000 2,535,000 289,219 1,167,605 18,804 10,365,610 0.71% 407 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.(3) Figures taken from City of Rosemount lease documents.Governmental ActivitiesCity of RosemountRatios of Outstanding Debt by TypeLast Ten Fiscal YearsBusiness - TypeActivities104
Schedule 10 Percentage ofEstimated Less Restricted Total EstimatedMarket G.O. Debt Service General Market PerYearPopulation(1)Value(2) Debt (3) Funds Bonded DebtValue Capita2010 21,874 2,238,851,500$ 21,245,000$ 1,936,318$ 19,308,682$ 0.86% 883$ 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 2018 24,866 2,589,101,527 11,683,682 184,655 11,499,027 0.44% 462 2019 25,460 2,782,042,325 10,057,587 192,407 9,865,180 0.35% 387 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 are taken from Schedule 9.General Bonded Debt OutstandingCity of RosemountRatios of Net General Bonded Debt OutstandingLast Ten Fiscal Years105
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 9,179,201$ 100.00% 9,179,201$
Overlapping Debt:
School Districts:
I.S.D. 196 - Rosemount 143,850,000 14.30% 20,570,550
I.S.D. 199 - Inver Grove Heights 54,400,000 5.70% 3,100,800
I.S.D. 200 - Hastings 76,787,524 0.11% 84,466
Regional:
Metropolitan Council 5,735,000 (3) 0.73% 41,866
Total Overlapping Debt 280,772,524$ 23,797,682$
Total Direct & Overlapping Debt 289,951,725$ 32,976,883$
(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, Baker Tilly Municipal Advisors, LLC
(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, 2019
106
City of Rosemount Legal Debt Margin Calculation for Fiscal Year 2019Estimated Market Value2,782,042,325$ Debt Limitation - 3% of Estimated Market Value 83,461,270 Debt Applicable to Limitation: Total Bonded Debt 9,805,000$ Less: Special Assessment Bonds 2,535,000$ Tax Increment Bonds 4,780,000 Revenue Bonds 1,110,000 Port Authority Bonds 445,000 Amount Available for Repayment of G.O. Bonds 192,407 9,062,407 Total Debt Applicable to Limitation 742,593 Legal Debt Margin82,718,677$ 2010201120122013201420152016201720182019Estimated Market Value 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$ 2,589,101,527$ 2,782,042,325$ Debt Limit - 3% of Estimated Market Value - 67,165,545 63,409,740 57,425,298 56,006,315 58,458,431 63,827,939 68,612,400 73,042,918 77,673,046 83,461,270 Total Net Debt Applicable to Debt Limit 2,008,682 1,799,274 1,710,368 1,602,093 1,481,496 1,298,857 1,184,483 1,037,241 890,345 742,593 Legal Debt Margin 65,156,863$ 61,610,466$ 55,714,930$ 54,404,222$ 56,976,935$ 62,529,082$ 67,427,917$ 72,005,677$ 76,782,701$ 82,718,677$ Legal debt margin as a percentage of the debt limit 97.01% 97.16% 97.02% 97.14% 97.47% 97.97% 98.27% 98.58% 98.85% 99.11%Note: Under State law, the City's outstanding general debt cannot exceed 3% of the total estimated market value of the City. The legal debt margin is the City's available borrowing authority under State law and is calculated by subtracting the net debt applicable to the legal debt limit from the legal debt limit.Fiscal YearSchedule 12Legal Debt Margin InformationLast Ten Fiscal Years107
Net RevenueAvailableSpecialGross For Debt AssessmentYear Revenue Expenses (1) Service Principal (2) Interest Total Coverage Collections Principal (3) Interest Total Coverage2010 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 5,528,083 3,740,785 1,787,298 445,000 50,560 495,560 360.66% 718,051 1,745,000 48,140 1,793,140 40.04%2018 5,634,576 3,954,469 1,680,107 390,000 39,108 429,108 391.53% 1,895,665 865,000 58,506 923,506 205.27%2019 5,632,784 4,982,808 649,976 145,000 31,993 176,993 367.23% 639,203 895,000 85,508 980,508 65.19%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) 2011 includes call payments on 2001B, 2002B & 2003B bonds and 2013 includes call payment on 2005C bonds.(3) 2011 includes calls for 2002A & 2003A bonds.Debt Service RequirementsCity of RosemountG.O. Revenue BondsDebt Service RequirementsSchedule 13Pledged-Revenue CoverageLast Ten Fiscal YearsG.O. Special Assessment Bonds108
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)
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 54,975 1,295,980,650 5,181 3.4% 37.6
2017 24,295 57,638 1,400,315,210 5,066 2.7% 37.8
2018 24,866 57,638 1,433,226,508 5,279 2.6% 37.8
2019 25,460 57,638 1,467,463,480 5,695 2.9% 37.8
(1) 2010 is a regular decennial census figure. All remaining years 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 2017 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.
2016's median age is the most current information available so 2017 - 2019 shown as the same age.
109
2019 2010
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
110
2010201120122013201420152016201720182019Function/ProgramGeneral Government Administration 4.50 4.50 3.50 3.50 3.50 3.50 4.50 4.50 4.50 4.50 Finance 4.30 4.30 4.30 4.30 4.55 4.55 4.55 4.55 5.05 5.10 Community Development 9.75 9.75 9.50 9.50 9.50 9.50 9.50 9.50 9.50 10.50 Police Sworn Officers 22.00 22.00 22.00 22.00 23.00 23.00 23.00 24.00 25.00 24.00 Nonsworn Employees 3.25 3.25 3.25 3.25 3.25 3.00 3.00 3.00 3.00 3.00 Fire Firefighters and Officers 43.00 43.00 41.00 43.00 42.00 45.00 52.00 47.00 42.00 42.00 Public Works Building Maintenance - - 0.80 0.80 0.80 0.85 0.85 1.25 1.25 1.25 Fleet Maintenance 2.10 2.10 2.20 2.20 2.20 2.30 2.30 2.30 2.30 2.30 Street Maintenance 6.40 6.40 5.80 5.80 5.80 6.00 6.00 6.00 6.30 6.30 Parks Maintenance 5.60 5.60 4.60 4.60 4.60 4.65 4.65 5.00 5.05 5.05 Parks and Recreation Parks & Rec 9.50 9.50 9.50 9.50 9.50 9.50 10.25 10.25 10.25 10.25 Arena 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.88 1.90 Utilities Water 5.13 4.83 4.68 4.68 4.68 4.88 4.88 4.88 5.11 4.55 Sewer 5.13 4.83 4.68 4.68 4.68 4.88 4.88 4.88 5.06 4.50 Storm Water 2.30 2.10 2.10 2.10 2.10 2.30 2.30 2.55 2.88 4.30 124.81 124.01 119.75 121.75 122.00 125.75 134.50 131.50 129.12 129.50 Sources: Finance DepartmentNote: Employees listed are full-time and permanent part-time employees. Seasonal and temporary positions are not included.Schedule 16City of RosemountFull-Time/Permanent Part-Time City Government Employees by Function/ProgramLast Ten Fiscal YearsFiscal Year111
2010201120122013201420152016201720182019Function/ProgramGeneral Government Total Permits Issued by the Building Department 2,400 2,359 2,251 2,471 2,879 2,677 3,033 3,136 3,503 3,997 Total Number of Inspections Conducted 4,311 4,048 3,553 4,296 4,618 5,467 5,927 5,425 6,317 8,001 Police Number of Calls for Service 14,432 14,554 14,346 13,730 15,538 16,894 16,691 16,194 15,166 17,533 Number of Patrol Miles 211,460 152,097 194,764 186,490 195,393 204,226 185,101 186,155 227,530 199,931 Adult Arrests 340 432 369 312 230 465 326 406 375 355 Juvenile Arrests 182 146 107 102 101 88 105 85 87 74 Traffic Violations 1,605 2,232 2,610 2,147 2,452 1,872 1,939 1,372 1,187 1,088 Parking Violations 284 296 378 436 197 207 271 88 178 264 Fire Number of Calls Answered 630 690 724 637 715 710 720 744 820 894 Fires Extinguished 34 34 52 35 38 33 38 60 46 48 Public Works Street Resurfacing (Miles) 10.50 1.30 2.30 1.60 1.20 - 1.20 1.95 3.15 1.20 Park Acres Mowed 134 134 154 154 154 154 160 160 167 167 Parks and Recreation Overall Program Participation 14,500 14,500 14,500 15,000 15,000 15,200 15,200 15,200 15,500 15,800 Hours of Ice Time Used 2,577 2,515 2,577 2,479 2,378 2,670 2,678 2,805 2,704 2,999 Water Connections 6,381 6,431 7,464 7,576 7,701 7,827 7,938 8,107 8,281 8,462 Water Main Breaks - - - 1 1 2 1 1 1 1 Average Daily Consumption (In Gallons) 2,261,972 2,344,546 2,665,979 2,412,638 2,233,593 2,227,616 2,520,915 2,530,849 2,250,066 2,136,434 Sewer Connections 6,363 6,414 6,505 6,614 6,734 6,734 6,968 7,050 7,198 7,376 Sources: Various City departments.Schedule 17City of RosemountOperating Indicators by Function/ProgramLast Ten Fiscal YearsFiscal Year112
2010201120122013201420152016201720182019Function/ProgramGeneral 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 8/6 9/6 9/6 10/6 10/6 10/6Fire Stations 2 2 2 2 2 2 2 2 2 2 Fire Units (Vehicles & Trailer) 14 14 14 15 15 15 16 16 16 17 Public Works Buildings 3 3 3 3 3 3 3 3 3 3 City Maintained Streets (Miles) 103 103 105 106 108 110 110 113 114 115 Street Lights 1,500 1,500 1,510 1,520 1,539 1,561 1,568 1,599 1,601 1,622 Parks and Recreation Community Centers 1 1 1 1 1 1 2 2 2 2 Shelters/Other Buildings 3 3 3 3 3 3 3 3 3 3 Acreage 440 467 467 534 533 533 540 540 540 540 Parks 27 28 28 27 29 29 30 30 30 30 Playgrounds 20 20 20 20 21 21 21 21 21 21 Baseball/Softball Diamonds 20 20 22 23 23 23 24 24 24 24 Soccer/Football Fields 16 16 16 19 19 19 20 20 24 24 Tennis Courts 8 8 8 8 12 12 12 12 12 12 Water Water Mains (Miles) 122 125 127 129 130 130 134 135 135 138 Wells (Municipal/Rural) 8 8 8 8 8 8 8 8 9 9 Water Towers 4 4 4 4 4 4 4 4 4 4 Fire Hydrants 1,330 1,342 1,342 1,366 1,412 1,420 1,445 1,450 1,452 1,560 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 12,096,000 12,096,000 12,096,000 12,096,000 12,096,000 12,384,000 12,384,000 12,384,000 14,976,000 14,976,000 Sewer Sanitary Sewer Mains (Miles) 91 95 97 98 98 98 100 103 103 105 Storm Sewer Mains (Miles) 84 84 86 86 88 89 91 105 105 111 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 2 2 2 2 2 2 2 2 2 2 (Dakota County Technical College)Sources: Various City departments.Schedule 18City of RosemountCapital Asset Statistics by Function/ProgramLast Ten Fiscal YearsFiscal Year113
Management Report
for
City of Rosemount, Minnesota
December 31, 2019
THIS PAGE INTENTIONALLY LEFT BLANK
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, 2019. 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
April 29, 2020
C E R T I F I E D
A C C O U N T A N T S
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
Jaclyn M. Huegel, CPA
Kalen T. Karnowski, CPA
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
Standard Letterhead-r2.qxp_167639 Letterhead-RV1 9/7/18 6:34 PM Page 1
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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, 2019. 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, 2019:
• 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 three findings based on our testing of the City’s compliance with Minnesota laws
and regulations:
1. We noted that the City held pledged collateral of a general obligation of a state or local
government that was not rated “A” of better by a national bond rating service as required
by Minnesota Statutes § 118A.03.
2. 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.
3. We noted for one purchase of greater than $25,000, but less than $175,000, the City did
not follow purchasing policies as required by Minnesota Statutes § 471.345, Subd. 4,
requiring multiple quotes.
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FOLLOW-UP ON PRIOR YEAR FINDINGS AND RECOMMENDATIONS
As part of our audit of the City’s financial statements for the year ended December 31, 2019, 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:
• The City had cash in excess of federal deposit insurance with one bank as of December 31, 2018,
which was not adequately covered by pledged collateral with a market value of 110 percent of the
excess, as required by state statutes. The City had sufficient collateral pledged to cover deposit
balances; however, the amount pledged was below the 110 percent statutory requirement. The
City corrected the prior year finding in 2019, and had sufficient collateral pledged to cover
deposit balances.
OTHER OBSERVATIONS AND RECOMMENDATIONS
Impact of Novel Coronavirus (COVID-19)
Shortly after the end of the 2019 fiscal year, the onset of the novel coronavirus (COVID-19) pandemic
caused substantial volatility in economic conditions and tremendous disruption in the way governments,
businesses, and individuals function. Minnesota cities may experience the impact of this pandemic in a
myriad of financial areas, such as: declines in investment rates of return, cash flow issues , increased
utility billing and property tax delinquencies, significant increases in the number and frequency of
employees working remotely, challenges in processing general and payroll disbursements, disruption of
prescribed internal control procedures, delays in internal and external financial reporting, and new
compliance requirements attached to potential federal relief subsidies. As your city adapts to the new
normal of municipal operations in a post-COVID-19 world, the assessment of and responses to new risks
that may accompany operational changes will be critical to the safeguarding of city resources and sound
financial stewardship. We encourage management and governance to include a robust financial risk
assessment process when planning responses to these challenges, and to reassess and adapt internal
controls over financial transactions and reporting to align with significant changes made to daily
operations, even those intended to be temporary.
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, 2019; however, the City implemented the following governmental
accounting standards during the fiscal year:
• Governmental Accounting Standards Board (GASB) Statement No. 83, Certain Asset Retirement
Obligations, which addressed accounting and financial reporting for certain asset retirement
obligations, which are legally enforceable liabilities associated with the retirement of a tangible
capital asset.
• GASB Statement No. 84, Fiduciary Activities, which established new criteria for identifying and
reporting fiduciary activities.
• GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and
Direct Placements, which improved and clarified the information to be disclosed in notes to
government financial statements related to debt, including direct borrowings and direct
placements.
-3-
• GASB Statement No. 90, Majority Equity Interests—an Amendment of GASB Statements No. 14
and No. 61, which improved the consistency and comparability of reporting a government’s
majority equity interest in a legally separate organization and the relevance of financial stat ement
information for certain component units.
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/Other Post-Employment Benefits (OPEB) – The City has recorded liabilities and
activity for pension benefits and OPEB. These obligations include calculations using actuarial
methodologies described in GASB Statement Nos. 68 and 75. These actuarial calculations include
significant assumptions, including projected changes, healthcare insurance costs, 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.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The disclosures included in the notes to the basic financial statements related to OPEB
and pension benefits are particularly sensitive, due to the materiality of the liabilities, and the large and
complex estimates involved in determining the disclosures.
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. There were no misstatements detected as a result of audit procedures that were material,
either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
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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 April 29, 2020.
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 (MD&A) and the
remaining budgetary, pension, and OPEB related 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 section and the statistical section, 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.
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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 2018 fiscal year, local ad valorem property tax levies provided 41.5 percent of the total
governmental fund revenues for cities over 2,500 in population, and 36.7 percent for cities under 2,500 in
population. Total property taxes levied by all Minnesota cities for taxes payable in 2019 increased
5.6 percent from the prior year.
The total tax capacity value of property in Minnesota cities increased about 7.1 percent for the 2019 levy
year. The tax capacity values used for levying property taxes are based on the assessed market values for
the previous fiscal year (e.g., tax capacity values for taxes levied in 2019 were based on assessed market
values as of January 1, 2018), so the trend of change in these tax capacity values lags somewhat behind
the housing market and economy in general.
The City’s estimated market value increased 6.3 percent for taxes payable in 2018 and increased
7.5 percent for taxes payable in 2019. 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
$3,000,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Estimated Market Value
-6-
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 a city’s 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 6.0 percent for 2018 and increased
7.3 percent for 2019.
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
$35,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Taxable Tax Capacity
The following table presents the average tax rates applied to city residents for each of the last three levy
years:
Rates expressed as a percentage of net tax capacity
2017 2018 2019
Average tax rate
City 41.8 41.0 39.4
County 28.0 26.6 25.4
School 23.3 21.4 20.6
Special taxing 4.9 4.3 4.2
Total 98.0 93.3 89.6
City of
Rosemount
The increase in tax capacity values previously discussed, contributed to the decrease in the City’s average
tax rate presented in the table above.
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GOVERNMENTAL FUND BALANCES
The following table summarizes the changes in the fund balances of the City’s governmental funds during
the year ended December 31, 2019, presented both by fund balance classification and by fund:
Increase
2019 2018 (Decrease)
Fund balances of governmental funds
Total by classification
Nonspendable 529$ 34,032$ (33,503)$
Restricted 4,921,523 5,375,931 (454,408)
Committed 517,102 223,619 293,483
Assigned 16,522,782 13,758,394 2,764,388
Unassigned 7,893,190 7,503,588 389,602
Total governmental funds 29,855,126$ 26,895,564$ 2,959,562$
Total by fund
General 10,559,040$ 9,995,409$ 563,631$
Debt Service 2,449,174 3,209,605 (760,431)
Capital Projects 13,856,932 11,300,057 2,556,875
Port Authority TIF 2,395,413 2,119,361 276,052
Nonmajor funds 594,567 271,132 323,435
Total governmental funds 29,855,126$ 26,895,564$ 2,959,562$
as of December 31,
Governmental Funds Change in Fund Balance
Fund Balance
In total, the fund balances of the City’s governmental funds increased by $2,959,562 during the year
ended December 31, 2019.
The largest changes were in assigned fund balances as noted in the table above. Fund balances assigned to
the Capital Projects Fund accounted for a majority of the increase in assigned fund balance.
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GOVERNMENTAL FUNDS REVENUES
The following table presents the per capita revenue of the City’s governmental funds for the past
three years, along with state-wide averages.
We have included the most recent comparative state-wide averages available from the Office of the State
Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the typical
major sources of governmental fund revenue will naturally vary between cities based on factors such as a
city’s stage of development, location, size and density of its population, property values, services it
provides, and other attributes. It will also differ from year -to-year, due to the effect of inflation and
changes in its operation. Also, certain data in these tables may be classified differently than how they
appear in the City’s financial statements in order to be more comparable to the state-wide information,
particularly in separating capital expenditures from current expenditures.
We have designed this section of our management report using per capita data in order to better identify
unique or unusual trends and activities of the City. We intend for this type of comparative and trend
information to complement, rather than duplicate, information in the MD&A. An inherent difficulty in
presenting per capita information is the accuracy of the population count, which for most years is based
on estimates.
Year 2017 2018 2019
Population 2,500–10,000 10,000–20,000 20,000–100,000 24,295 24,866 25,460
Property taxes 495$ 472$ 493$ 466$ 471$ 473$
Tax increments 28 27 43 34 35 34
Franchise and other taxes 41 48 50 11 11 10
Special assessments 53 40 57 30 76 25
Licenses and permits 38 35 47 31 36 36
Intergovernmental revenues 303 271 157 50 63 123
Charges for services 130 102 112 142 193 169
Other 97 78 49 68 80 82
Total revenue 1,185$ 1,073$ 1,008$ 832$ 965$ 952$
December 31, 2018
City of RosemountState-Wide
Governmental Funds Revenue per Capita
With State-Wide Averages by Population Class
The City’s governmental fund revenues for 2019 were $24,265,416, an increase of $273,749 (1.1 percent)
from the prior year. On a per capita basis, the City received $952 in governmental fund revenue for 2019,
a decrease of $13 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 intergovernmental
revenues, which increased $60 per capita from the prior year, with an increase in one-time grants for the
Family Resource Center expansion project and Horseshoe Lake Park Project. Special assessment revenue
decreased $51 per capita from the prior year, with more prepayments on assessed projects in 2018.
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GOVERNMENTAL FUNDS EXPENDITURES
The expenditures of governmental funds will also vary from state-wide averages and from year-to-year,
based on the City’s circumstances. Expenditures are classified into three types as follows:
• Current – These are typically the general operating type expenditures occurring on an annual
basis, and are primarily funded by general sources, such as taxes and intergovernmental revenues.
• Capital Outlay and Construction – These expenditures do not occur on a consistent basis, more
typically fluctuating significantly from year-to-year. Many of these expenditures are
project-oriented, and are often funded by specific sources that have benefited from the
expenditure, such as special assessment improvement projects.
• Debt Service – Although the expenditures for debt service may be relatively consistent over the
term of the respective debt, the funding source is the important factor . Some debt may be repaid
through specific sources, such as special assessments or redevelopment funding, while other debt
may be repaid with general property taxes.
The City’s expenditures per capita of its governmental funds for the past three years, together with
state-wide averages, are presented in the following table:
Year 2017 2018 2019
Population 2,500–10,000 10,000–20,000 20,000–100,000 24,295 24,866 25,460
Current
General government 150$ 121$ 104$ 134$ 126$ 128$
Public safety 286 272 294 177 187 185
Streets and highways 135 125 106 170 142 150
Parks and recreation 96 115 104 64 67 69
All other 75 74 78 – 3 4
Total current 742 707 686 545 525 536
Capital outlay
and construction 417 351 307 234 357 279
Debt service
Principal 178 153 109 92 57 62
Interest and fiscal 41 39 29 16 14 13
Total debt service 219 192 138 108 71 75
Total expenditures 1,378$ 1,250$ 1,131$ 887$ 953$ 890$
December 31, 2018
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 2019 were $22,644,349, a decrease of $1,052,824
(4.4 percent) from the prior year. On a per capita basis, the City expended a total of $890 in 2019, a
decrease of $63 from the previous year. The biggest change was in capital outlay, which fluctuates from
year-to-year based on timing and approved projects.
As the above table reflects, the City’s expenditures per capita have historically been below the state-wide
average. The largest change occurred in capital outlay and construction spending, which decreased
$78 per capita based on timing and approved projects.
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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.
2015 2016 2017 2018 2019
Fund Balance $9,557,677 $9,888,534 $9,556,250 $9,995,409 $10,559,040
Cash (Net)$9,694,642 $10,397,380 $10,130,901 $10,656,356 $10,985,167
Revenue $11,997,352 $12,409,954 $12,669,945 $13,580,346 $14,220,550
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
General Fund Financial Position
Year Ended December 31,
The City’s General Fund cash and investments balance at December 31, 2019 was $10,985,167, an
increase of $328,811 from the previous year. Total fund balance at year-end was $10,559,040, an increase
of $563,631 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; allows 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 73 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 2019 fiscal year represents approximately
55 percent of annual expenditures based on projected 2020 levels.
-11-
The following graph reflects the City’s General Fund revenue sources for 2019 compared to budget:
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Taxes Licenses and
Permits
Intergovernmental Charges
for
Services
Other
General Fund Revenue –Budget and Actual (Budgetary Basis)
Actual Budget
General Fund revenue for 2019 was $14,220,550, which was $503,252 (3.7 percent) more than budget.
Favorable variances in every category except for general property tax, due in part to conservative
budgeting, contributed to the overall revenue variance. Taxes were $42,392 under budget. Licenses and
permits were over budget $176,138, with more building permit activity than expected. The City had more
charges for services revenue than expected, with a favorable variance of $139,077 related to the volume
of development activity. Other revenue also ended the year with actual sources coming in over budget, as
presented in the graph above, which was primarily in interest earnings.
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 73 percent of General
Fund revenues in 2019:
Taxes Intergovernmental All Other
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
2018 $10,148,566 $460,756 $2,971,024
2019 $10,428,208 $749,242 $3,043,100
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
General Fund Revenue by Source
Year Ended December 31,
Total General Fund revenue for 2019 was $640,204 (4.7 percent) more than last year. Taxes increased by
$279,642, due to an increase in the approved tax levy. Intergovernmental revenue was $288,486 more
than last year, with an increase in MSA funding in the current year. Remaining revenue sources of the
General Fund were $72,076 more than 2018, due to increasing charges for services and licenses and
permits.
-12-
The following graph illustrates the components of General Fund spending for 2019 compared to budget:
$–
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
General Government Public Safety Public Works Parks and Recreation
General Fund Expenditures –Budget and Actual (Budgetary Basis)
Actual Budget
General Fund expenditures for 2019 on a budgetary basis were $13,489,377, which was $101,339
(0.7 percent) under budget. Spending for public safety was under budget by $196,535, which was
partially offset by parks and recreation going over budget by $110,536.
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
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
2018 $2,972,769 $4,651,700 $3,525,071 $1,663,618 $454
2019 $3,090,733 $4,702,502 $3,820,949 $1,751,115 $–
$–
$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
$5,000,000
General Fund Expenditures by Function
Year Ended December 31,
Total General Fund expenditures for 2019 on an accounting principles generally accepted in the United
States of America-basis were $551,687 (4.3 percent) more than the previous year. The increase was
spread across all categories, with the exception of the slight decrease in capital outlay as presented in the
table above.
-13-
ENTERPRISE FUNDS OVERVIEW
The City maintains several enterprise funds to account for services the City provides that are financed
primarily through fees charged to those utilizing the service. This section of the report provides you with
an overview of the financial trends and activities of the City’s enterprise funds, which include the Water,
Sewer, Storm Water, and Arena Funds.
The utility funds comprise a considerable portion of the City’s activities. These funds help to defray
overhead and administrative costs and provide additional support to general government operations by
way of annual transfers. We understand that the City is proactive in reviewing these activities on an
ongoing basis and we want to reiterate the importance of continually monitoring these operations. Over
the years, we have emphasized to our city clients the importance of these utility operations being
self-sustaining, preventing additional burdens on general government funds. This would include the
accumulation of net position for future capital improvements and to provide a cushion in the event of a
negative trend in operations.
ENTERPRISE FUNDS FINANCIAL POSITION
The following table summarizes the changes in the financial position of the City’s enterprise funds during
the year ended December 31, 2019, presented both by classification and by fund:
Increase
2019 2018 (Decrease)
Net position of enterprise funds
Total by classification
Net investment in capital assets 98,007,299$ 97,977,645$ 29,654$
Unrestricted 28,881,892 26,994,489 1,887,403
Total enterprise funds 126,889,191$ 124,972,134$ 1,917,057$
Total by fund
Water 45,371,778$ 44,697,610$ 674,168$
Sewer 34,806,570 34,724,406 82,164
Storm Water 44,988,963 43,852,046 1,136,917
Arena 1,721,880 1,698,072 23,808
Total enterprise funds 126,889,191$ 124,972,134$ 1,917,057$
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 $1,917,057 during the year ended
December 31, 2019. The increase in net position is primarily for connection fees and capital contributions
recognized in the current year.
-14-
WATER FUND
At December 31, 2019, the Water Fund had a cash balance of $11,795,343 and total net position of
$45,371,778. Of this net position total, $33,594,795 is the investment in capital assets, while unrestricted
has a balance of $11,776,983. 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
$50,000,000
2015 2016 2017 2018 2019
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
$2,750,000
$3,000,000
2015 2016 2017 2018 2019
Water Fund Operating Results
Year Ended December 31,
Operating Expenses Operating Revenue
The Water Fund maintains a healthy financial position. During fiscal 2019, the Water Fund recognized an
operating loss of $472,851, compared to an operating income of $299,444 in fiscal 2018. The decrease in
operating revenue was due to a combination of less water usage and a change in the rate structure 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.
Operating expenses were up in the current year, with more depreciation and other services and charges.
-15-
SEWER FUND
At December 31, 2019, the Sewer Fund had a cash balance of $7,423,290 and total net position of
$34,806,570. Of this net position total, $27,215,418 is the investment in capital assets, while $7,591,152
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
2015 2016 2017 2018 2019
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
$3,250,000
2015 2016 2017 2018 2019
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 2019, the Sewer Fund reported an operating loss of $1,090,651, compared to an operating
loss of $1,114,611 in fiscal 2018. A change in the rate structure and an increase in 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.
-16-
STORM WATER FUND
At December 31, 2019, the Storm Water Fund had a cash balance of $9,265,707 and total net position of
$44,988,963. Of this net position total, $35,904,785 is the investment in capital assets, while $9,084,178
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
$50,000,000
2015 2016 2017 2018 2019
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:
$–
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
2015 2016 2017 2018 2019
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 graph above. The Storm Water Fund maintains a healthy financial position. During
fiscal 2019, the Storm Water Fund reported an operating loss of $411,351, compared to operating loss of
$38,527 in fiscal 2018. An increase in personnel services and other services and charges contributed to
the decrease in operations compared to the prior year.
-17-
ARENA FUND
At December 31, 2019, the Arena Fund had a cash balance of $573,500 and total net position of
$1,721,880. Of this net position total, $1,292,301 is the investment in capital assets, while $429,579 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
2015 2016 2017 2018 2019
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:
$–
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
2015 2016 2017 2018 2019
Arena Fund Operating Results
Year Ended December 31,
Operating Expenses Operating Revenue
During fiscal 2019, the Arena Fund reported an operating loss of $112,645, compared to an operating loss
of $211,382 in fiscal 2018. After investment earnings of $9,639, intergovernmental revenue of $314, and
net transfers in of $126,500, net position increased by $23,808. The decrease in expenses was in
maintenance charges, which decreased compared to the prior year.
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
In addition to fund-based information, the current reporting model for governmental entities also requires
the inclusion of two government-wide financial statements designed to present a clear picture of the City
as a single, unified entity. These government-wide financial statements provide information on the total
cost of delivering services, including capital assets and long-term liabilities.
STATEMENT OF NET POSITION
The Statement of Net Position essentially tells you what the City owns and owes at a given point in time,
the last day of the fiscal year. Theoretically, net position represents the resources the City has leftover to
use for providing services after its debts are settled. However, those resources are not always in s pendable
form, or there may be restrictions on how some of those resources can be used. Therefore, net position is
divided into three components: net investment in capital assets, restricted, and unrestricted.
• Net Investment in Capital Assets – The portion of net position reflecting equity in capital assets
(i.e., capital assets minus related debt).
• Restricted Net Position – The portion of net position equal to resources whose use is l egally
restricted minus any noncapital-related liabilities payable from those same resources.
• Unrestricted Net Position – The residual balance of net position after the elimination of net
investment in capital assets and restricted net position.
The following table presents the components of the City’s net position as of December 31, 2019 and
2018, for governmental activities and business-type activities:
Increase
2019 2018 (Decrease)
Net position
Governmental activities
Net investment in capital assets 85,993,734$ 80,094,490$ 5,899,244$
Restricted 6,255,555 8,108,470 (1,852,915)
Unrestricted 18,205,045 14,596,678 3,608,367
Total governmental activities 110,454,334 102,799,638 7,654,696
Business-type activities
Net investment in capital assets 98,007,299 97,977,645 29,654
Unrestricted 28,881,892 26,994,489 1,887,403
Total business-type activities 126,889,191 124,972,134 1,917,057
Total net position 237,343,525$ 227,771,772$ 9,571,753$
As of December 31,
The City’s total net position at December 31, 2019 was $9,571,753 more than the previous year.
Governmental activities increased $7,654,696 and business-type activities increased $1,917,057.
The change in components of governmental activity net position reflects the City’s continued investment
in street infrastructure in the current year. Capital contributions from developers also increased the net
investment in capital assets of governmental activities. The increase in business-type activities net
position reflects the enterprise funds activity previously discussed.
At the end of the current fiscal year, the City is able to present positive balances in all categories of net
position, both for the government as a whole, as well as for its separate governmental and business -type
activities. The same situation held true for the prior fiscal year.
-19-
STATEMENT OF ACTIVITIES
The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other
transactions that increase or reduce total net positions. These amounts represent the full cost of providing
services. The Statement of Activities provides a more comprehensive measure than just the amount of
cash that changed hands, as reflected in the fund-based financial statements. This statement includes the
cost of supplies used, depreciation of long-lived capital assets, and other accrual-based expenses.
The following table presents the change in the net position of the City for the years ended December 31,
2019 and 2018:
2018
Program
Expenses Revenues Net Change Net Change
Net (expense) revenue
Governmental activities
General government 3,826,860$ 3,915,953$ 89,093$ 621,052$
Public safety 5,332,313 579,976 (4,752,337) (4,699,077)
Public works 5,692,171 4,379,068 (1,313,103) (194,371)
Culture, education, and recreation 2,217,403 1,154,264 (1,063,139) (543,420)
Conservation and economic development 56,611 31,463 (25,148) (30,774)
Interest and fiscal changes 281,999 – (281,999) (295,431)
Business-type activities
Water 2,845,741 3,937,666 1,091,925 1,871,780
Sewer 3,053,021 2,909,480 (143,541) (260,217)
Storm water 1,732,753 2,773,260 1,040,507 1,176,037
Arena 550,487 438,156 (112,331) (211,382)
Total net (expense) revenue 25,589,359$ 20,119,286$ (5,470,073) (2,565,803)
General revenues
Taxes 13,564,954 13,129,329
Unrestricted investment earnings 1,363,395 733,420
Other 113,477 89,672
Total general revenues 15,041,826 13,952,421
Change in net position 9,571,753 11,386,618
Net position – beginning 227,771,772 216,385,154
Net position – ending 237,343,525$ 227,771,772$
2019
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.
-20-
LEGISLATIVE UPDATES
The 2019 legislative session began with a projected state general fund surplus of $1.052 billion. The
legislative agenda was primarily focused on setting an operating budget for the state’s fiscal
2020-2021 biennium. At the end of the regular session, only a higher education budget bill had been
completed. However, after a special session, the Legislature was able to address the 11 remaining budget
bills, as well as pass an omnibus tax bill and small pension bill. The following is a brief summary of
specific legislative changes from the 2019 session or previous legislative sessions potentially impacting
Minnesota cities.
Local Government Aid (LGA) – An additional $26 million was added to the appropriation for the city
LGA formula beginning in fiscal 2020, bringing the total state-wide appropriation to $560.4 million. An
additional $4 million was added to the appropriation beginning in fiscal 2021. The LGA distribution
formula for 2020 was altered to provide that a city’s 2020 LGA may not be less than its 2019 aid, and the
cap on maximum aid losses in any year thereafter was modified.
Bonding Bill – The 2019 bonding bill provided financing for approximately $102 million of projects and
funding authorized by the 2018 omnibus bonding bill, which had been legally challenged due to their
reliance on the use of the Environment and Natural Resources Trust Fund to generate appropriation
bonds. The 2019 Legislature changed the funding source for these projects to general obligation bonds,
clearing the way for the projects to go forward. Included in this was $59 million earmarked for city water
and wastewater projects through the state Public Facilities Authority.
Local Option Sales Tax Process – Effective May 1, 2019, the process for cities to enact a local option
sales tax have been modified, requiring special legislation prior to a local referendum vote. Cities must
now adopt a resolution specifying the proposed sales tax rate and time frame for the sales tax. The
resolution must also include a detailed description of the project or projects (up to five) to be funded by
the sales tax, the amount to be raised for each project, and documentation of the regional significance of
each project. The resolution must be submitted to the House and Senate tax committee chairs by
January 31st to be considered for special legislation by the State Legislature. If special legislation is
approved, voter approval must be obtained by referendum at a general election within two years of
legislative approval.
Wage Theft – The Legislature enacted a number of changes in employment law aimed at reducing wage
theft by employers. The changes require employers to provide written notice to new employees of specific
wage information including rate of pay, allowances, paid leave, deductions, days in a pay period, and the
employer’s legal name, address, and phone number. Employers must also provide an earnings statement
that includes similar information. The changes also create new requirements for employer recordkeeping
for hours worked each day and each workweek, and imposes penalties for failure to do so and for refusal
to make the records available for inspection by the Department of Labor.
Written Estimates of Consulting Fees – Effective August 1, 2019, upon request by applicants for a
permit, license, or other approval relating to real estate development or construction, cities are required to
provide a written, nonbinding estimate of consulting fees to be charged to the applicant based on
information available at that time. The related application will not be considered complete until the city
has provided the estimate, received the required application fees, and received the applicant ’s signed
acceptance of the fee estimate along with a signed statement that the applicant has not relied on the fee
estimate in its decision to proceed with the application.
Contract Retainage – Effective for contracts entered into August 1, 2019 or later, contract retainage
must be released no later than 60 days after the related construction project reaches substantial completion
as defined by statute. After substantial completion, cities can still withhold amounts equal to,
1) 250 percent of the cost to correct or complete work known at the time of substantial completion, and
2) the greater of $500 or 1 percent of the value of the contract pending the completion of “final
paperwork,” including documents required to fulfill contractual obligations such as operating manuals,
payroll documents for projects subject to prevailing wage requirements, and contractor payroll tax
withholding affidavits. Any resulting reduction in retainage must be passed from the contractor to all
subcontractors at the same rate.
-21-
Driver and Vehicle Registration System (VTRS) – The Legislature selected VTRS, a third party vendor
system, to replace the failed Minnesota Licensing and Registration System (MNLARS). Fees from
driver’s licenses, license plates, and filing fees were increased and a technology surcharge imposed on
vehicle registration renewals to pay for the implementation of VTRS, the decommissioning of MNLARS,
and to temporarily increase the capacity of Driver and Vehicle Services to meet public service needs.
Included in this is $13 million appropriated in 2019 for reimbursement grants to deputy registrars for
costs related to MNLARS. The grants, which would be determined by formula, would require the deputy
registrar accepting the grant to release the state from any further liability or claims related to MNLARS.
Vaping Ordinance Authority – Effective July 1, 2019, cities are allowed to enact and enforce
ordinances with more stringent measures than the Minnesota Clean Indoor Air Act to protect individuals
from involuntary exposure to aerosol or vapor from electronic delivery devices.
Water Connection Fees – Effective January 1, 2020, the annual water connection fees cities are required
to collect on behalf of the Minnesota Department of Health for water testing and support has been
increased from $6.36 to $9.72.
Military Exception to Open Meeting Law – Effective August 1, 2019, members of a public body that
are in the military will be allowed to participate in public meetings via interactive television when they
are at a required drill, deployed, or on active duty. The member may participate under this exception up to
three times a year.
Pension Plan Changes – The 2019 pension bill included several changes to the various pension plans
throughout the state:
• Changes to plans administered by the Public Employees Retirement Association (PERA)
included:
o The rights of PERA General Employees Retirement Fund (GERF) plan and Public
Employees Police and Fire Fund (PEPFF) plan members to purchase service credit for
periods of military leave were expanded. This gives plan members the right to purchase up to
five years of service credit for military service leave that is not federally protected because
the service occurred prior to public employment or the member did not meet the payment
deadlines applicable to federally protected leave service credit purchases.
o The Phased Retirement Option (PRO) program, which gives cities an opportunity to retain
potentially retiring employees that are GERF plan members aged 62 or over, was altered and
made permanent. Under a PRO arrangement, an employee would begin collecting a
retirement annuity, but could continue working for their current employer for up to five years
if they agree to a work schedule that represents a reduction of at least 25 percent each pay
period from their current schedule, up to a maximum of 1,044 hours per year. Employees
would not be allowed to contribute to a pension benefit plan or accrue additional service time
while working under a PRO.
o A process was established for municipalities and joint powers entities to terminate
participation in the PERA Statewide Volunteer Firefighter (SVF) plan if, 1) the entity has
either eliminated its fire department or ceased using the services of all departing firefighters
and any other noncareer or volunteer firefighters, and 2) the entity’s account has assets
sufficient to cover all liabilities including the fully vested liabilities for all departing
firefighters and administrative expenses.
-22-
• Changes impacting volunteer firefighter relief associations (VRFAs) included:
o Effective January 1, 2020, vesting schedules for defined contribution plans cannot require
that a member have more than 20 years of active service to become 100 percent vested in the
member’s account, or provide for a larger vesting percentage with respect to the completed
years of service than as provided in the statutory schedule.
o Effective January 1, 2020, the permitted graded vesting schedule for defined benefit pension
plans is reduced from 20 years to 10 years for full vesting. Also, plans cannot require that a
member have more than 20 years of active service to become 100 percent vested in the
member’s accrued service pension, or provide for a larger vesting percentage with respect to
the completed years of service than as provided in the statutory schedule.
o Effective January 1, 2020, supplemental benefits are allowed to be paid to designated
beneficiaries or estates when plan members have no surviving spouse or children.
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-23-
ACCOUNTING AND AUDITING UPDATES
The following is a summary of GASB standards expected to be implemented in the next few years.
However, due to the COVID-19 outbreak, the GASB is currently considering a proposal to delay the
original implementation dates of these and other standards by a year. At this point, the implementati on
dates for the standards listed below are tentative and may be subject to change.
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 the 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 lease 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 probability 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.
GASB STATEMENT NO. 91, CONDUIT DEBT OBLIGATIONS
The primary objectives of this statement are to provide a single method of reporting conduit debt
obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by
issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This
statement achieves those objectives by clarifying the existing definition of a conduit debt obligation;
establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for
accounting and financial reporting of additional commitments and voluntary commitments extended by
issuers and arrangements associated with conduit debt obligations; and improving required note
disclosures.
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A conduit debt obligation is defined as a debt instrument having all of the following characteristics:
• There are at least three parties involved: (1) an issuer, (2) a third party obligor, and (3) a debt
holder or a debt trustee.
• The issuer and the third party obligor are not within the same financial reporting entity.
• The debt obligation is not a parity bond of the issuer, nor is it cros s-collateralized with other debt
of the issuer.
• The third party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt
issuance.
• The third party obligor, not the issuer, is primarily obligated for the payment of all amounts
associated with the debt obligation (debt service payments).
This statement also addresses arrangements, often characterized as leases, that are associated with conduit
debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a
conduit debt obligation and used by third party obligors in the course of their activities.
This statement requires issuers to disclose general information about their conduit debt obligations,
organized by type of commitment, including the aggregate outstanding principal amount of the issuers’
conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities
related to supporting the debt service of conduit debt obligations also should disclose information about
the amount recognized and how the liabilities changed during the reporting period.
The requirements of this statement are effective for reporting periods beginning after December 15, 2020.
Earlier application is encouraged.
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
Special Purpose Audit Reports
Year Ended
December 31, 2019
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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 4–6
Table of Contents
CITY OF ROSEMOUNT
Special Purpose Audit Reports
Year Ended December 31, 2019
DAKOTA COUNTY, MINNESOTA
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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, 2019, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated April 29, 2020.
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 appropriate 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 2019-001,
that we consider to be a significant deficiency.
(continued)
C E R T I F I E D
A C C O U N T A N T S
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
Jaclyn M. Huegel, CPA
Kalen T. Karnowski, CPA
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
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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
April 29, 2020
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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, 2019, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated April 29, 2020.
MINNESOTA LEGAL COMPLIANCE
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 contracting and bidding, deposits and investments, conflicts of interest,
public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing
sections of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor
pursuant to Minnesota Statutes § 6.65, except as described in the Schedule of Findings and Responses as
items 2019-002, 2019-003, and 2019-004. 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, insofar as they relate to accounting matters.
CITY’S RESPONSES TO THE FINDINGS
The City’s responses to the findings identified in our audit are described in the accompanying Schedule of
Findings and Responses. The City’s responses were not subjected to the auditing procedures applied in
the audit of the financial statements and, accordingly, we express no opinion on them.
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
April 29, 2020
C E R T I F I E D
A C C O U N T A N T S
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
Jaclyn M. Huegel, CPA
Kalen T. Karnowski, CPA
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
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CITY OF ROSEMOUNT
Schedule of Findings and Responses
Year Ended December 31, 2019
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A. FINDINGS – SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER FINANCIAL
REPORTING
2019-001 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 should have 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, 2019
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B. FINDINGS – MINNESOTA LEGAL COMPLIANCE AUDIT
2019-002 COLLATERAL
Criteria – Minnesota Statutes § 118A.03, Subd. 2.
Condition – Minnesota Statutes require for collateral held that is a general obligation of a
state or local government that it must be rated “A” or better by a national bond rating service.
This requirement was not met for a portion of the City’s pledged collateral.
Context – The City had improper collateral at both dates tested. This is a current year
finding.
Cause – This was an oversight by city personnel.
Effect – The City was not in compliance with state statutes for allowable collateral.
Recommendation – We recommend that the City reviews its collateral to ensure it follows
requirements of Minnesota Statutes.
Management Response – There is no disagreement with the audit finding. This was an
oversight recognized by city staff and rectified in April 2020. The City’s staff reviews
collateral coverage regularly and will assure that appropriate and adequate coverage is
obtained in the future.
2019-003 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 § 270C.66 (either a
Commissioner of Revenue Form IC134 or a Contractor’s Withholding Affidavit). The City
did not obtain the required certificate for one contract completed during 2019.
Context – One of two contracts 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 Commissioner of
Revenue Form IC134 or a Contractor’s Withholding Affidavit.
Recommendation – We recommend that the City review withholding affidavit procedures in
place to ensure future compliance with this statute.
Management Response – The City agrees with the finding. The City will review
requirements with appropriate staff to assure the planned controls are being followed and the
required Commissioner of Revenue Form IC134 or a Contractor’s Withholding Affidavit are
obtained prior to final payment.
CITY OF ROSEMOUNT
Schedule of Findings and Responses (continued)
Year Ended December 31, 2019
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B. FINDINGS – MINNESOTA LEGAL COMPLIANCE AUDIT (CONTINUED)
2019-004 CITY CONTRACTING – QUOTES
Criteria – Minnesota Statutes § 471.345, Subd. 4.
Condition – Minnesota Statutes require that each contract from $25,000 to $175,000 be made
either upon sealed bids or by direct negotiation, by obtaining two or more quotations for the
purchase or sale when possible, and without advertising for bids or otherwise complying with
the requirements of competitive bidding. All quotations obtained shall be kept on file for a
period of at least one year after receipt thereof. The City did not follow this process for one
purchase during the current year.
Context – One of three purchases tested were not in compliance. This is a current year
finding.
Cause – This was an oversight by city personnel.
Effect – The City did not ensure that they were obtaining the required quotes or ensure
documentation that proper quote procedures were completed.
Recommendation – We recommend that the City review purchasing procedures in place to
ensure future compliance with this statute.
Management Response – The City agrees with the finding. The City will review purchasing
requirements with appropriate staff to assure the planned controls are being followed.
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