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Comprehensive Annual Financial Report - 2021Annual Comprehensive Financial Report For the Fiscal Year Ended December 31, 2021 • Golden Valley, Minnesota photo by Janice LauLainen 2021 Views of the Valleyphoto by Janice LauLainen 2021 Views of the Valley CITY OF GOLDEN VALLEY HENNEPIN COUNTY, MINNESOTA Annual Comprehensive Financial Report for Year Ended December 31, 2021 Prepared by Finance Department Sue Virnig – Finance Director Aaron Gilbert – Accounting Supervisor – Started July 12, 2021 Sue Watson –Accounting Coordinator – Thru May 21, 2021 Jennifer Hoffman – Payroll Accountant – Started May 24, 2021 Wanita Williams – Payroll Accountant – Thru June 14, 2021 THIS PAGE INTENTIONALLY LEFT BLANK Page INTRODUCTORY SECTION CITY COUNCIL AND OTHER OFFICIALS i ORGANIZATION CHART ii FINANCE DIRECTOR’S LETTER OF TRANSMITTAL iii–vii GFOA CERTIFICATE OF ACHIEVEMENT viii FINANCIAL SECTION INDEPENDENT AUDITOR’S REPORT 1–3 MANAGEMENT’S DISCUSSION AND ANALYSIS 4–15 BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements Statement of Net Position 16 Statement of Activities 17–18 Fund Financial Statements Governmental Funds Balance Sheet 19–20 Reconciliation of the Balance Sheet to the Statement of Net Position 21 Statement of Revenue, Expenditures, and Changes in Fund Balances 22–23 Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances to the Statement of Activities 24 Statement of Revenue, Expenditures, and Changes in Fund Balances – General Fund – Budget and Actual 25 Proprietary Funds Statement of Net Position 26–29 Statement of Revenue, Expenses, and Changes in Net Position 30–31 Statement of Cash Flows 32–35 Notes to Basic Financial Statements 36–75 REQUIRED SUPPLEMENTARY INFORMATION PERA – General Employees Retirement Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability 76 Schedule of City Contributions 76 PERA – Public Employees Police and Fire Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability 77 Schedule of City Contributions 77 Golden Valley Fire Department Relief Association Schedule of Changes in Net Pension Asset and Related Ratios 78 Schedule of City Contributions and Nonemployer Contributing Entities 79 Other Post-Employment Benefits Plan Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 80 Notes to Required Supplementary Information 81–88 CITY OF GOLDEN VALLEY HENNEPIN COUNTY, MINNESOTA Table of Contents Page SUPPLEMENTARY INFORMATION COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES Nonmajor Governmental Funds 89–90 Combining Balance Sheet 91 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 92 Nonmajor Special Revenue Funds Combining Balance Sheet 93–94 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 95–96 Nonmajor Debt Service Funds Combining Balance Sheet 97 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 98 Nonmajor Capital Project Funds Combining Balance Sheet 99–100 Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 101–102 General Fund Schedule of Revenue – Budget and Actual 103 Schedule of Expenditures – Budget and Actual 104–105 Internal Service Funds 106 Combining Statement of Net Position 107 Combining Statement of Revenue, Expenses, and Changes in Net Position 108 Combining Statement of Cash Flows 109 OTHER CITY INFORMATION Schedules of Sources and Uses of Public Funds for Tax Increment Financing Districts North Wirth Parkway No. 1505 110 Highway 55 West No. 1506 111 Cornerstone Creek No. 1507 112 Winnetka/Medicine Lake (Liberty Crossing) No. 1508 113 STATISTICAL SECTION (UNAUDITED)114 Net Position by Component 115–116 Changes in Net Position 117–120 Governmental Activities Tax Revenues by Source 121 Fund Balances of Governmental Funds 122–123 Changes in Fund Balances of Governmental Funds 124–125 General Governmental Tax Revenues by Source 126 Assessed Value and Estimated Actual Value of Taxable Property 127–128 Property Tax Rates 129 Principal Property Taxpayers 130 Property Tax Levies and Collections 131 Ratios of Outstanding Debt by Type 132–133 Ratios of General Bonded Debt Outstanding 134 Direct and Overlapping Governmental Activities Debt 135 Legal Debt Margin Information 136–137 Pledged Revenue Coverage 138–139 Demographic and Economic Statistics 140 Principal Employers 141 Full-Time Equivalent City Government Employees by Function 142–143 Operating Indicators by Function 144–145 Capital Asset Statistics by Function 146–147 CITY OF GOLDEN VALLEY HENNEPIN COUNTY, MINNESOTA Table of Contents (continued) INTRODUCTORY SECTION THIS PAGE INTENTIONALLY LEFT BLANK -i- Term Expires Shep Harris Mayor 12/31/2023 Maurice Harris Councilmember 12/31/2023 Denise La Mare-Anderson Councilmember 12/31/2025 Gillian Rosenquist Councilmember 12/31/2025 Kimberly Sanberg Councilmember 12/31/2023 Timothy Cruikshank City Manager Appointed Sue Virnig Finance Director Appointed Maria Cisneros City Attorney Appointed Baker Tilly Bond Consultants Appointed CITY COUNCIL CITY OFFICIALS CITY CONSULTANTS CITY OF GOLDEN VALLEY HENNEPIN COUNTY, MINNESOTA City Council and Other Officials Year Ended December 31, 2021 Physical Development Public Works Police Fire Human Resources Parks & Recreation Administrative Services Legal Communications Boards and Commissions Board of Zoning Appeals Civil Service Commission Diversity, Equity, & Inclusion Commission Environmental Commission Human Services Commission Open Space & Recreation Commission Police Employment, Accountability, & Community Engagement Commission Planning Commission City Council/ HRA Citizens of Golden Valley City Clerk City Manager Organization Chart -ii- -iii- August 5, 2022 Dear Honorable Mayor, City Council, City Manager, and Residents of Golden Valley: I am pleased to present the Annual Comprehensive Financial Report (ACFR) of the City of Golden Valley, Minnesota (the City) for the fiscal year ended December 31, 2021. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate, in all material respects, and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included. The City’s financial statements have been audited by Malloy, Montague, Karnowski, Radosevich & Co., P.A., a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City for the fiscal year ended December 31, 2021, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City’s basic financial statements for the fiscal year ended December 31, 2021, are fairly presented in conformity with accounting principles generally accepted in the United States of America. The independent auditor’s report is presented as the first component of the financial section of this report. The preparation of this ACFR is a requirement of state law. Also, the ACFR is required by the bond rating agencies before they will rate the City’s bonds. The report can be used by the City Council and the citizens of the City to gain a better understanding of the financial condition of the City. Accounting principles generally accepted in the United States of America require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of management’s discussion and analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found immediately following the report of the auditors. The ACFR includes all agencies and entities for which the City is financially accountable, including the Golden Valley Housing and Redevelopment Authority (HRA), which is reported as a blended component unit of the City. -iii- -iv- PROFILE OF THE CITY The City, incorporated in 1886, is an almost fully developed community in Hennepin County. It encompasses about 10.73 square miles and has an estimated population of 22,552. The City is a Statutory Plan B form of government, governed by a City Council composed of the mayor and four councilmembers. The City Council is responsible for setting policies and ordinances that govern the City and for appointing the city manager and city attorney. The city manager is responsible for carrying out the policies and hiring the employees that oversee the day-to-day operations of the City. Police services are provided by 31 sworn officers, which include the police chief, 2 commanders and 7 sergeants. Fire services are provided by approximately 50 paid on-call firefighters, fire chief, two assistant fire chiefs, and 2.5 firefighters that are code enforcement officers. The City has an ISO Class 2 insurance rating. The 2021–2022 biennial budget was created to help serve as the foundation for the City’s financial planning and control. Departments submit budget requests to the finance department in May. The city manager presents the proposed budget to the City Council for review starting in July, to be approved by September 30 each year, for a proposed tax rate for its property owners. All budget workshops are open to the public. The final adoption of the budget and levy are approved in December. Each year of the biennial budget, the first year is adopted and the second year is approved in concept only. ECONOMIC CONDITION AND OUTLOOK The City’s top priorities have been maintaining the City’s infrastructure—streets, water and sewer, pipes, parks, public buildings—representing a significant community investment. After all, the value of private property relates directly to what surrounds it. The City made significant efforts, with many public meetings, to plan the Infrastructure Renewal Program that will start after the Pavement Management Program (PMP) ends in 2025. In 2021, the City’s PMP program was resumed, after being delayed in 2020 due to the unrest of COVID-19. The City approved a 10-year Capital Improvement Program (CIP) in 2021 for the years 2022–2031. In 2021, the City came back from the unforeseen COVID-19 pandemic. Staff resumed projects starting with the 2021 PMP. In 2021, the City received their first half monies from the American Rescue Plan Act. The plan was discussed and approved at many City Council meetings. In 2021, the City paid off the 2010 and 2011 PMP bonds early. The 2021 fiscal year ended and assigned $269,499 for 2022 expenditures. Cost containment helped keep total overall expenditures under budget in 2021. The City will once again take a conservative approach for the 2022 budget year. -v- The following table shows the City’s building activity for the last 10 years: Year Number Value 2012 798 53,201,489$ 2013 984 65,531,059$ 2014 1,055 78,090,465$ 2015 1,118 109,928,275$ 2016 998 104,651,963$ 2017 1,144 239,041,991$ 2018 951 79,654,541$ 2019 1,024 71,658,716$ 2020 1,008 39,335,260$ 2021 1,059 65,111,223$ Total Permits The following major projects were started or completed throughout the City in 2021: Residential Single-Family Homes: • 8 new single-family homes were constructed with a value of $4,943,200. • 950 residential remodels and additions were completed with a total value of $22,884,197. • 109 commercial remodel/addition projects with a total valuation of $42,227,026. Commercial (Over $1 Million in Value) General Mills – Infrastructure improvements valued at $10,728,431. Carousel Auto – Remodel and expansion at $7,597,067. Academy of Whole Learning – Remodel building for use as a school for children with autism valued at $7,427,049. Blue Pearl Vet Clinic – Construction of a shell space with a value of $2,100,000. -vi- LONG-TERM FINANCIAL PLANNING An unassigned fund balance goal in the General Fund of 60 percent of current year budgeted General Fund expenditures was approved in the fund balance policy adopted by the City Council for budgetary and planning purposes. The City strongly believes maintaining this higher level of fund balance is prudent, due to its debt load and the increased uncertainty of its revenue sources. This practice is also supported by the City’s bond rating agency. In 1995, through its PMP, the City began reconstructing its streets that did not meet standards. At the end of 2021, the City has completed 115.36 of 120.00 miles. The City is looking forward to finishing the Pavement Management Program and beginning the next phase of the Infrastructure Renewal Plan. The Brookview Facility, completed in December 2017, provided a site for many new programs and activities, along with the new restaurant and golf area, and has brought many to the City for a delightful outing. In 2020 and 2021, golf was revitalized with the onset of COVID-19. In 2022, the course will construct a new irrigation system. The City Council assigned 2021 year-end fund balance in the General Fund in the amount of $224,499 for their work with Diversity, Equity and Inclusion and Police Recruitment and $45,000 to help fund technology improvements. MAJOR INITIATIVES The City is a member of the Joint Water Commission (JWC), a joint powers organization that also includes the cities of New Hope and Crystal. The JWC purchases water from the City of Minneapolis for resale to the customers of the three cities. The JWC was set up in the early 1960s and has functioned effectively. The JWC has an emergency well backup system and is now working on financing future capital needs, such as replacing the three water towers, two reservoirs, and a distribution system. A CIP was approved to plan for the replacements until 2049, along with yearly financing to build reserves for those expenses. The City is working with Hennepin County, the cities of Crystal and New Hope, the Bassett Creek Watershed Management Organization, the Metropolitan Council Environmental Services, and the state of Minnesota to implement a plan to minimize flood damage in various parts of the City. This project includes multiple flood storage projects over a long timeframe and may also include structural flood proofing of a number of homes. The improvements through the last four years, with the City and many outside agencies funding, has helped further the improvements to reduce the flooding. The 2022–2031 CIP outlines those projects. The City has a Pyramid of Success. In 2021, Organizational Priorities were: Strategic Development and Redevelopment, Effective Governance, Infrastructure Maintenance and Enhancement, Financial Wellness, and Community Affairs. From these priorities come action steps. All make up the core services, mission, and vision for the City. Financial Wellness includes an ongoing action plan for debt reduction and Fiscal Disparities Formula Update. In 2021, the City Council prioritized projects, issues, and ideas in relationship to needs and wants and the financial cost to the City and community. Each year, the City Council reviews the Pyramid of Success. -vii- INTERNAL CONTROL Management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon the comprehensive framework of internal control that it has established for this purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. AWARDS AND ACKNOWLEDGEMENTS The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its ACFR for the fiscal year ended December 31, 2021. The City has received this award since 1987. In order to be awarded a Certificate of Achievement, the government had to publish an easily readable and efficiently organized ACFR that satisfied both accounting principles generally accepted in the United States of America and applicable legal requirements. The Certificate of Achievement is valid for one year only. We believe our current ACFR continues to meet the Certificate of Achievement program requirements. We are submitting it to the GFOA to determine its eligibility for another certificate. The 2021 ACFR meets the highest professional standards and was prepared in a timely and cost-effective manner. This could never have been accomplished without the excellent work of our finance department. Sue Watson, Wanita Williams, Jennifer Hoffman and Aaron Gilbert have helped with the work needed to finish this report. Credit also must be given to the Mayor and City Council for their support, and for maintaining the highest standards of professionalism in the management of the City’s finances. Yours Truly, Susan M. Virnig Finance Director Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Golden Valley Minnesota For its Annual Comprehensive Financial Report For the Fiscal Year Ended December 31, 2020 Executive Director/CEO -viii- FINANCIAL SECTION THIS PAGE INTENTIONALLY LEFT BLANK -1- INDEPENDENT AUDITOR’S REPORT To the City Council and Management City of Golden Valley, Minnesota OPINIONS 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 Golden Valley, Minnesota (the City) as of and for the year ended December 31, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2021, and the respective changes in financial position and, where applicable, cash flows thereof, and the budgetary comparison for the General Fund for the year then ended, in accordance with accounting principles generally accepted in the United States of America. BASIS FOR OPINIONS 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. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical resp onsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. RESPONSIBILITIES OF MANAGEMENT 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; and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern within 12 months beyond the financial statements date, including any currently known information that may raise substantial doubt shortly thereafter. (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 -2- AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance, but is not absolute assurance and, therefore, is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgement made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we: •Exercise professional judgment and maintain professional skepticism throughout the audit. •Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. •Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed. •Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. •Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. 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 is the responsibility of management and, 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 t o 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. (continued) -3- Supplementary 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 supplementary information, as listed in the table of contents, are presented for purpose of additional analysis and are not a required part of the basic financial statements. Such 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 s tatements. The 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. Other Information Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections, but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated August 5, 2022 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 August 5, 2022 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF GOLDEN VALLEY Management’s Discussion and Analysis Year Ended December 31, 2021 -4- As management of the City of Golden Valley, Minnesota (the City), we have provided readers of the City’s financial statements with this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, located earlier in this report. FINANCIAL HIGHLIGHTS •The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of fiscal 2021 by $154,069,039 (net position). The City’s government-wide net position increased $11,525,297 in 2021, including increases of $7,065,853 and $4,459,444, attributable to its governmental and business-type activities, respectively. At year-end, the City reported positive balances in total net position and all net position categories for both the governmental and business-type activities, as was the case at the prior year-end. •At the end of the 2021 fiscal year, the City’s governmental funds reported combined ending fund balances of $51,156,130, an increase of $205,828 compared to the prior year-end. •The unassigned fund balance for the City’s General Fund was $13,258,756 at year-end, which represents 51.7 percent of 2021 General Fund expenditures and transfers out. •The City’s long-term bonded debt decreased $4,090,000 in 2021, excluding unamortized premiums, as the City issued $3,420,000 of general obligation special assessment bonds in 2021, while making principal payments of $7,510,000, which included $2,285,000 of outstanding bonds called before their scheduled maturities using available city resources. OVERVIEW OF THE FINANCIAL STATEMENTS The management’s discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, which are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also contains other supplementary information in addition to the basic financial statements. 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 private sector businesses. The Statement of Net Position presents information on all of the City’s assets, deferred outflows of resources, liabilities, and deferred 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 City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (delinquent taxes and special assessments). -5- Both of the government-wide financial statements distinguish functions of the City that are principally supported by property 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 include general government, public safety, physical development, public works, and parks and recreation. The business-type activities of the City include enterprises for water and sewer, storm sewer, golf course, motor vehicle licensing, and recycling. The government-wide financial statements include not only the City itself (known as the primary government), but also the Golden Valley Housing and Redevelopment Authority (HRA). The HRA is a legally separate entity, which functions, in essence, as a department of the City, to provide housing and redevelopment assistance through the administration of various programs. Therefore, the HRA has been included as a blended component unit within the City’s financial statements. Fund Financial Statements – A fund is a grouping of related accounts that is used to maintain control over resources segregated for specific activities or objectives. The City, like other 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 account for essentially the same functions reported as governmental activities in the government-wide financial statements. Unlike the government-wide financial statements, however, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, and the balances of spendable resources available at the fiscal year-end. 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 funds Balance Sheet and Statement of Revenue, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities. The City reports a number of individual governmental funds. Information is presented separately in the basic financial statements for the General, Street Reconstruction Debt Service, State Aid Construction Capital Project, Street Reconstruction Capital Project, and Winnetka/Medicine Lake Tax Increment Capital Project funds, which are considered major funds. Data from the other nonmajor governmental funds is combined into a single, aggregated presentation. Individual fund data for each of the nonmajor governmental funds is provided in the form of combining statements elsewhere in this report . The City adopts an annual appropriated budget for the General Fund. A budget-to-actual comparison is provided in this financial report for this fund. 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, only in more detail. The proprietary fund financial statements provide separate information for the City’s water and sewer, storm sewer, golf course, motor vehicle licensing, and recycling enterprise operations, all of which are reported as major funds of the City. Internal service funds are used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for workers’ compensation, payroll benefits, and vehicle maintenance activities. Because these internal service fund activities predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements elsewhere in this report. -6- Notes to Basic Financial Statements – The notes to basic financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. Other Information – Required supplementary information (RSI) on the City’s other post-employment benefits (OPEB) and pension plans is presented following the notes to basic financial statements. Combining and individual fund statements and schedules for nonmajor funds, along with other city information, are presented as supplementary information immediately following the RSI. Statistical tables are presented as the last section in this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As noted earlier, changes in net position may serve over time as a useful indicator of the City’s financial condition. The City’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $154,069,039 at the end of the 2021 fiscal year, which represents an increase in overall net position of $11,525,297 from current year operations. Net Position – The City has 47.2 percent of its total net position invested in capital assets (land, land improvements, buildings and improvements, machinery and equipment, infrastructure, and construction in progress) less any related debt used to acquire those assets that is still outstanding . The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot liquidate these liabilities. An additional 19.0 percent of the City’s net position represents resources that are subject to external restrictions on how they may be used. The remaining 33.8 percent of net position is unrestricted and may be used to meet the City’s ongoing obligations. The following is a summary of the City’s net position at the end of the last two fiscal years: 2021 2020 2021 2020 2021 2020 Current and other assets 68,566,611$ 64,551,491$ 33,241,908$ 29,204,106$ 101,808,519$ 93,755,597$ Capital assets 91,646,625 92,680,695 43,121,197 42,873,749 134,767,822 135,554,444 Total assets 160,213,236 157,232,186 76,363,105 72,077,855 236,576,341 229,310,041 Deferred outflows of resources 8,769,034 3,445,008 – – 8,769,034 3,445,008 Long-term liabilities (including current portion)70,552,188 78,326,861 2,371,460 2,493,517 72,923,648 80,820,378 Other liabilities 4,914,729 3,761,221 913,246 965,383 5,827,975 4,726,604 Total liabilities 75,466,917 82,088,082 3,284,706 3,458,900 78,751,623 85,546,982 Deferred inflows of resources 12,524,713 4,664,325 – – 12,524,713 4,664,325 Net position Net investment in capital assets 32,036,524 28,994,273 40,749,737 40,380,232 72,786,261 69,374,505 Restricted 29,277,763 26,738,440 – – 29,277,763 26,738,440 Unrestricted 19,676,353 18,192,074 32,328,662 28,238,723 52,005,015 46,430,797 Total net position 80,990,640$ 73,924,787$ 73,078,399$ 68,618,955$ 154,069,039$ 142,543,742$ Governmental Activities Business-Type Activities Total The increase in current and other assets was mainly in accumulated cash and temporary investments, and primarily resulted from the City’s positive operating results for the current year. -7- The following is a summary of the City’s changes in net position for the last two fiscal years: 2021 2020 2021 2020 2021 2020 Revenues Program revenues Charges for services 2,676,798$ 2,496,817$ 18,541,697$ 16,791,556$ 21,218,495$ 19,288,373$ Operating grants & contributions 888,261 617,891 34,261 66,990 922,522 684,881 Capital grants & contributions 3,478,561 733,444 – 1,605,931 3,478,561 2,339,375 General revenues Property taxes 27,352,013 26,593,034 – – 27,352,013 26,593,034 Franchise taxes 772,266 750,959 1,500,000 1,500,000 2,272,266 2,250,959 Unrestricted grants & contributions 16,398 1,693,378 – – 16,398 1,693,378 Other general revenues 80,706 122,994 – – 80,706 122,994 Investment earnings (charges)(204,549) 788,401 (50,826) 496,650 (255,375) 1,285,051 Gain on sale of capital assets 121,369 11,876 – – 121,369 11,876 Total revenues 35,181,823 33,808,794 20,025,132 20,461,127 55,206,955 54,269,921 Expenses General government 3,788,382 4,169,858 – – 3,788,382 4,169,858 Public safety 8,089,691 8,870,757 – – 8,089,691 8,870,757 Physical development 1,903,327 2,157,872 – – 1,903,327 2,157,872 Public works 10,477,892 9,716,950 – – 10,477,892 9,716,950 Parks and recreation 2,067,373 2,033,540 – – 2,067,373 2,033,540 Interest and fiscal charges 1,587,120 1,697,077 – – 1,587,120 1,697,077 Water and sewer – – 9,643,763 9,211,358 9,643,763 9,211,358 Storm sewer – – 1,968,509 2,217,110 1,968,509 2,217,110 Golf course – – 3,185,361 2,741,444 3,185,361 2,741,444 Motor vehicle licensing – – 443,418 462,777 443,418 462,777 Recycling – – 526,822 504,119 526,822 504,119 Total expenses 27,913,785 28,646,054 15,767,873 15,136,808 43,681,658 43,782,862 Change in net position before transfers 7,268,038 5,162,740 4,257,259 5,324,319 11,525,297 10,487,059 Transfers – internal activities (202,185) 416,308 202,185 (416,308) – – Transfers – capital assets – (619,769) – 619,769 – – Change in net position 7,065,853 4,959,279 4,459,444 5,527,780 11,525,297 10,487,059 Net position Beginning 73,924,787 68,965,508 68,618,955 63,091,175 142,543,742 132,056,683 Ending 80,990,640$ 73,924,787$ 73,078,399$ 68,618,955$ 154,069,039$ 142,543,742$ TotalGovernmental Activities Business-Type Activities Governmental Activities – Governmental activities net position increased by $7,065,853. Key elements of this net increase include: • Capital grants and contributions increased by $2,745,117 from the prior year, due to increases in state aid for municipal state aid-eligible street construction and special assessment prepayments. • Property taxes increased $758,979 from the prior year, due to an increase in the adopted levy. • Unrestricted grants and contributions decreased $1,676,980, due to the City receiving $1,638,218 of Coronavirus Relief Fund (CRF) federal grant funding in 2020. • Investment earnings (charges) were $992,950 lower than last year, due to declines in the fair value of the City’s investment portfolio and available interest rates. • Governmental activities expenses decreased $732,269 (2.6 percent) overall, mainly due to additional general government, public safety, and physical development expenses in 2020 related to COVID-19 that were financed with federal CRF funding. • Expenses for the public works program areas were $760,942 higher than last year, due to increased street maintenance and depreciation. -8- The following graphs provide additional information related to governmental activity revenues and expenses for the current year: Expenses and Program Revenues – Governmental Activities $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 $11,000,000 General Government Public Safety Physical Development Public Works Parks and Recreation Interest and Fiscal Charges Expenses Program Revenues Revenue by Source – Governmental Activities -9- Business-Type Activities – Business-type activities net position increased by $4,459,444. Key elements of this net increase include: • Charges for services increased $1,750,141, mainly due to an increase in water charges caused by increases in rates and irrigation consumption, in addition to increased revenue generated from the Brookview golf course and grill facility and motor vehicle licensing operation, due to the easing of COVID-19-related restrictions. • Capital grants were $1,605,931 lower than last year, mainly due to a decline in grants and capital contributions received to reimburse projects in the Storm Sewer Utility Fund. • Investment earnings (charges) were $547,476 lower than the prior year, due to declines in the fair value of the City’s pooled investment portfolio. • Business-type activities expenses were $631,065 higher than the previous year in total, including the following changes: o An increase of $432,405 in water and sewer utility costs, primarily from increased water purchases for irrigation, due to a drier year, and o An increase of $443,917 in golf course expenses, mainly due to increased operating costs at the grill facility with the easing of COVID-19-related operating restrictions. -10- The following graphs provide additional information related to business-type activity revenues and expenses for the current year: Expenses and Program Revenues – Business-Type Activities $– $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000 $11,000,000 $12,000,000 Water and Sewer Storm Sewer Brookview Golf Course Motor Vehicle Licensing Recycling Expenses Program Revenues Revenue by Source – Business-Type Activities -11- FINANCIAL ANALYSIS OF THE CITY’S FUNDS Governmental Funds – At the end of the fiscal year, the City’s governmental funds reported combined ending fund balances of $51,156,130, an increase of $205,828 in comparison with the prior year. The unassigned portion of fund balance is $12,511,838, which may be used for any approved public purpose. The remainder of the fund balance is either: 1) not in spendable form ($26,653), 2) restricted by various externally imposed constraints ($22,970,466), 3) internally committed for particular purposes ($161,790), or 4) internally assigned for particular purposes ($15,485,383). General Fund – The fund balance of the General Fund decreased by $2,122,141 to $15,554,908 at December 31, 2021. The main reason for this decrease was the City’s decision to utilize $2,350,000 of accumulated fund balance to call the remaining principal on two outstanding bond issues in advance of their scheduled maturities to reduce future debt service interest costs and debt levies. General Fund operating results can be summarized as follows: 2021 2020 Fund balance – beginning of year 17,677,049$ 15,152,089$ Additions Revenue 23,511,687 24,146,037 Other sources 30,000 30,000 Total additions 23,541,687 24,176,037 Deductions Expenditures 19,496,248 19,083,497 Other uses 6,167,580 2,567,580 Total deductions 25,663,828 21,651,077 Fund balance – end of year 15,554,908$ 17,677,049$ Of the total fund balance, $26,653 is nonspendable for prepaids and the City has assigned $2,000,000 for self-insurance to finance the potential risk related to insurance deductibles or settlements in excess of commercial insurance limits, $45,000 for equipment replacement, and $224,499 for city-wide diversity, equity, and inclusion training. The unassigned fund balance at December 31, 2021 of $13,258,756 is equal to 51.7 percent of total 2021 expenditures and other financing uses in the General Fund, which puts the fund in an excellent financial position. These reserves are needed for working capital to help pay for expenditures during the first half of the year, since the City does not receive any significant money from its main revenue source—property taxes—until July of each year. General Fund revenue was $23,511,687 in 2021, a decrease of $634,350 from the previous year. The decrease was primarily attributable to the federal CRF grant revenue the City received in the previous year, which was used to maintain city services, finance unanticipated costs, and provide assistance to city residents during the COVID-19 pandemic. General Fund 2021 expenditures of $19,496,248 represented an increase of $412,751 from the prior year, mainly due to increased street maintenance activity. Other financing uses for 2021 were $3,600,000 higher than last year, as additional transfers out were approved for the early bond redemptions discussed previously, and to finance a portion of the City’s 2021 Pavement Management Program expenditures, thereby reducing the amount of debt financing necessary. -12- The General Fund budget was amended during the year to shift expenditures between program areas; however, total expenditure appropriations for 2021 were not increased by the amendments. The following is an analysis of 2021 General Fund revenue compared to budget: Original Final Over (Under) Revenue Budget Budget Actual Final Budget Ad valorem taxes 20,151,285$ 20,151,285$ 20,293,146$ 141,861$ 0.7 % Licenses 258,895 258,895 248,595 (10,300) (4.0) Permits 984,000 984,000 1,347,121 363,121 36.9 Intergovernmental 38,685 38,685 56,964 18,279 47.3 Charges for services 1,550,210 1,550,210 1,292,454 (257,756) (16.6) Fines and forfeits 165,000 165,000 127,096 (37,904) (23.0) Investment income 150,000 150,000 (63,306) (213,306) (142.2) Other revenue 204,620 204,620 209,617 4,997 2.4 Totals 23,502,695$ 23,502,695$ 23,511,687$ 8,992$ 0.0 (Under) Budget Percent Over Permits were over budget, due to increased development-related activity in the City. Charges for services were under budget, mainly in the parks and recreation area, as participation in recreation programs rebounded with the loosening of COVID-19 restrictions, but have not yet returned to typical levels. Investment income (charges) were under budget, due to less favorable market conditions than anticipated. The following is an analysis of 2021 General Fund expenditures compared to budget: Original Final Over (Under) Expenditure Budget Budget Actual Final Budget General government 1,932,560$ 1,724,275$ 1,710,541$ (13,734)$ (0.8) % Administrative services 2,271,430 2,289,175 2,308,688 19,513 0.9 Casualty insurance 350,000 350,000 269,420 (80,580) (23.0) Public safety 8,411,230 8,520,485 7,612,972 (907,513) (10.7) Physical development 2,129,745 2,166,025 2,095,315 (70,710) (3.3) Public works 4,449,405 4,481,650 4,499,814 18,164 0.4 Parks and recreation 1,270,745 1,283,505 999,498 (284,007) (22.1) Totals 20,815,115$ 20,815,115$ 19,496,248$ (1,318,867)$ (6.3) (Under) Budget Percent Over Public safety expenditures were significantly under budget, due to personal service cost savings from unfilled positions and less paid on-call fire salaries, along with the increased public demand for services related to COVID-19 abating. Physical development expenditures were under budget, due primarily to more engineering personnel costs being charged out to capital projects than anticipated. Parks and recreation expenditures were under budget, primarily due to recreation programs not fully recovering from COVID-19 restrictions. -13- Other Major Governmental Funds – The City reported four other major governmental funds for 2021. The Street Reconstruction Debt Service Fund is used to account for the debt service on the general obligation improvement bonds issued to finance street improvements. At year -end, this fund had a fund balance of $9,730,143 accumulated for future debt service. Fund balance increased by $705,810 in 2021, mainly due to prepayments on new special assessments. This fund received a transfer of $2,350,000 from the City’s General Fund during the year that was used to call the remaining principal on two bond issues in advance of their stated maturity dates. The State Aid Construction Capital Project Fund is used to account for street construction projects that qualify for municipal state aid. Fund balance increased $42,240 in 2021, ending the year at $3,786,784, as project activity was relatively minor. The Street Reconstruction Capital Project Fund is used to account for the City’s ongoing Pavement Management Program (PMP). After scaling back PMP activity in 2020, due to COVID-19, the City resumed program activity in 2021, financing planned 2021 PMP construction with a $3.4 million bond issue and a transfer of $650,000 from the General Fund. Fund balance increased $1,024,739 during the year, leaving a fund balance of $6,246,403 at year-end. The Winnetka/Medicine Lake Tax Increment Capital Project Fund ended the year with a fund balance deficit of $746,918. Fund balance improved by $524,790 in 2021, as tax increment revenue exceeded the interest paid on interfund loans and transfers out made to finance improvements within the tax increment district area. The deficit is expected to be eliminated through future tax increment collections. The City’s remaining nonmajor governmental funds ended the year with cumulative fund balances of $16,584,810, an increase of $30,390 from the previous year-end. One of the main reasons for this increase was budgeted transfers of $3,140,550 made from the General Fund to various nonmajor capital projects funds in 2021, in keeping with the City’s goal of providing financing for current and future capital needs , while minimizing the City’s debt load. Proprietary Funds – The City’s proprietary funds provide the same information for the business-type activities found in the government-wide financial statements, but in more detail. The City’s enterprise funds had a total net position of $74,993,652 at year-end, of which $34,243,915 was unrestricted. The total net position of these funds improved by $4,011,029 during 2021. Utility Fund net position increased $2,828,956, due to operating income of $1,427,987 and the allocation of $1,500,000 of franchise taxes to this fund in 2021. Storm Sewer Utility Fund net position increased $809,473, due to operating income of $599,852 and transfers in of $240,155 for storm sewer improvement projects during the year. The Brookview Operating (Golf Course) Fund had an increase in net position of $557,402. Golf course operating revenue for 2021 increased $1,012,915 from the previous year, mainly due to the clubhouse grill facility and other amenities resuming regular operations after experiencing shut-downs and restrictions for much of the previous year, due to COVID-19. The Motor Vehicle Operating Fund had a decrease in net position of $206,556, as operations are slowly recovering from COVID-19-related closures and limitations. The Recycling Fund had an increase in net position of $21,754 for the year. -14- CAPITAL ASSETS AND LONG-TERM LIABILITIES Capital Assets – The City’s investment in capital assets (net of accumulated depreciation) for its governmental and business-type activities as of December 31, 2021 was $134,767,822, a decrease of $786,622 from the prior year. The City’s capital assets for the last two years are as follows: 2021 2020 2021 2020 2021 2020 Land 3,527,685$ 3,527,685$ 903,043$ 857,044$ 4,430,728$ 4,384,729$ Land improvements 8,001,061 7,843,922 3,356,022 3,330,859 11,357,083 11,174,781 Buildings and improvements 29,267,959 29,243,836 808,625 808,625 30,076,584 30,052,461 Machinery and equipment 17,058,832 16,771,647 5,078,164 4,944,026 22,136,996 21,715,673 Infrastructure 133,120,578 132,851,364 57,604,886 57,345,586 190,725,464 190,196,950 Construction in progress 14,737,620 9,460,651 5,516,547 3,502,164 20,254,167 12,962,815 Less accumulated depreciation (114,067,110) (107,018,410) (30,146,090) (27,914,555) (144,213,200) (134,932,965) Net total 91,646,625$ 92,680,695$ 43,121,197$ 42,873,749$ 134,767,822$ 135,554,444$ Governmental Activities Business-Type Activities Total The City’s capital assets before depreciation increased by $8,493,613 during 2021, mainly in construction in progress on street, utility, and storm sewer infrastructure projects. This increase was more than offset by a $9,280,235 increase in accumulated depreciation. Additional details of the City’s capital asset activity for the year can be found in Note 4 of the notes to basic financial statements. Long-Term Liabilities – The debt service funds account for the accumulation of resources to finance all of the City’s governmental activity general obligation debt. The revenue sources for these funds include annual tax levies, tax increments, franchise taxes, and special assessments. At year-end, there was $11,700,328 of fund balance restricted for debt service in the governmental funds. The revenue bonds will be paid from the designated business activity of the Storm Sewer Utility Fund. The following table presents the City’s long-term liabilities as of the last two year-ends: 2021 2020 2021 2020 2021 2020 G.O. special assessment bonds 36,300,000$ 38,800,000$ –$ –$ 36,300,000$ 38,800,000$ G.O. street reconstruction bonds 4,715,000 4,950,000 – – 4,715,000 4,950,000 HRA lease revenue bonds 14,925,000 15,615,000 – – 14,925,000 15,615,000 G.O. certificates of indebtedness – 280,000 – – – 280,000 G.O. tax increment bonds 915,000 1,035,000 – – 915,000 1,035,000 G.O. state aid street bonds 985,000 1,130,000 – – 985,000 1,130,000 Revenue bonds – – 2,340,000 2,460,000 2,340,000 2,460,000 Unamortized premiums 1,800,991 1,876,422 31,460 33,517 1,832,451 1,909,939 Compensated absences 1,636,179 1,863,057 – – 1,636,179 1,863,057 Net pension liability – PERA 7,401,796 11,121,817 – – 7,401,796 11,121,817 Total OPEB liability 1,873,222 1,655,565 – – 1,873,222 1,655,565 Total 70,552,188$ 78,326,861$ 2,371,460$ 2,493,517$ 72,923,648$ 80,820,378$ TotalGovernmental Activities Business-Type Activities The City issued $3,420,000 of new G.O. special assessment debt in 2021 and made debt principal payments of $7,510,000 during the year, including $2,285,000 of outstanding bonds called before their scheduled maturities using available city resources. Additional details of long-term liabilities activity for the year can be found in Note 5 of the notes to basic financial statements. -15- ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES Economic factors affect the preparation of annual budgets. The following factors were considered in preparing the 2022 budget: • The City’s 2022 budgeted tax levy went up by 7.0 percent from 2021. The City strives for a balanced budget with revenues equal to expenditures. • The City will maintain fund balance for working capital in the General Fund at 60.0 percent of the current year’s adopted expenditures, including year-end unassigned fund balance and the $2,000,000 assigned for self-insurance to meet that goal. • The City assigned $2,269,499 of fund balance in the General Fund at year-end for the following uses: $2,000,000 for self-insurance, $224,499 for expenditures to help fund diversity, equity and inclusion initiatives, and $45,000 for technology upgrades. • The City’s 2022 budget increased its housing levy to fully fund the entire housing and economic development manager position to lead implementation of the City’s housing initiatives and economic development strategies. This position would help find additional funding for affordable housing. • The City received one-half of the American Rescue Plan federal funds as a nonentitlement unit in 2021 to help with various projects following the U.S. Treasury’s guidance. The second half will arrive in 2022 to help complete the list of initiatives. The City has until the end of fiscal 2024 to expend or obligate these funds. REQUESTS FOR INFORMATION Questions concerning any of the information provided in this report or requests for additional information should be addressed by writing to the City of Golden Valley, Attention: Finance Director, 7800 Golden Valley Road, Golden Valley, Minnesota 55427 or by calling (763) 593-8010. GOVERNMENT-WIDE FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK Governmental Business-Type Activities Activities Total Assets Cash and temporary investments 58,115,650$ 31,317,632$ 89,433,282$ Delinquent taxes receivable 188,492 – 188,492 Special assessments receivable (net of allowance)2,714,202 319,390 3,033,592 Accounts and interest receivable 912,882 2,259,900 3,172,782 Due from other governmental units 2,337,329 – 2,337,329 Internal balances 1,028,308 (1,028,308) – Inventory 124,033 – 124,033 Prepaids 26,653 373,294 399,947 Net pension asset – fire relief 3,119,062 – 3,119,062 Capital assets Not depreciated 18,265,305 6,419,590 24,684,895 Depreciated, net of accumulated depreciation 73,381,320 36,701,607 110,082,927 Total assets 160,213,236 76,363,105 236,576,341 Deferred outflows of resources Pension plan deferments – PERA 8,004,756 – 8,004,756 Pension plan deferments – fire relief 372,034 – 372,034 OPEB plan deferments 392,244 – 392,244 Total deferred outflows of resources 8,769,034 – 8,769,034 Total assets and deferred outflows of resources 168,982,270$ 76,363,105$ 245,345,375$ Liabilities Accounts and contracts payable 454,189$ 406,065$ 860,254$ Accrued interest payable 673,597 24,460 698,057 Accrued salaries and employee benefits 872,297 – 872,297 Due to other governmental units 193,819 248,109 441,928 Deposits 1,752,906 234,612 1,987,518 Unearned revenue 967,921 – 967,921 Long-term liabilities Due within one year 6,403,288 125,000 6,528,288 Due in more than one year 64,148,900 2,246,460 66,395,360 Total liabilities 75,466,917 3,284,706 78,751,623 Deferred inflows of resources Pension plan deferments – PERA 10,736,197 – 10,736,197 Pension plan deferments – fire relief 1,229,619 – 1,229,619 OPEB plan deferments 558,897 – 558,897 Total deferred inflows of resources 12,524,713 – 12,524,713 Net position Net investment in capital assets 32,036,524 40,749,737 72,786,261 Restricted for Debt service 13,403,311 – 13,403,311 Redevelopment 783,977 – 783,977 Capital improvements 12,537,678 – 12,537,678 Fire relief pensions 2,261,477 – 2,261,477 Other purposes 291,320 – 291,320 Unrestricted 19,676,353 32,328,662 52,005,015 Total net position 80,990,640 73,078,399 154,069,039 Total liabilities, deferred inflows of resources, and net position 168,982,270$ 76,363,105$ 245,345,375$ CITY OF GOLDEN VALLEY Statement of Net Position December 31, 2021 See notes to basic financial statements -16- Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities General government 3,788,382$ 206,956$ 104,978$ 2,500$ Public safety 8,089,691 295,902 575,328 – Physical development 1,903,327 1,504,988 – – Public works 10,477,892 315,753 – 3,476,061 Parks and recreation 2,067,373 353,199 207,955 – Interest and fiscal charges 1,587,120 – – – Total governmental activities 27,913,785 2,676,798 888,261 3,478,561 Business-type activities Water and sewer 9,643,763 11,203,708 – – Storm sewer 1,968,509 2,592,294 (22,371) – Golf course 3,185,361 3,927,131 3,665 – Motor vehicle licensing 443,418 317,229 17 – Recycling 526,822 501,335 52,950 – Total business-type activities 15,767,873 18,541,697 34,261 – Total governmental and business-type activities 43,681,658$ 21,218,495$ 922,522$ 3,478,561$ General revenues Property taxes Franchise taxes Unrestricted grants and contributions Other general revenues Investment earnings (charges) Gain on sale of capital assets Transfers – internal activities Total general revenues and transfers Change in net position Net position – beginning Net position – ending Program Revenues CITY OF GOLDEN VALLEY Statement of Activities Year Ended December 31, 2021 See notes to basic financial statements -17- Governmental Business-Type Activities Activities Total (3,473,948)$ –$ (3,473,948)$ (7,218,461) – (7,218,461) (398,339) – (398,339) (6,686,078) – (6,686,078) (1,506,219) – (1,506,219) (1,587,120) – (1,587,120) (20,870,165) – (20,870,165) – 1,559,945 1,559,945 – 601,414 601,414 – 745,435 745,435 – (126,172) (126,172) – 27,463 27,463 – 2,808,085 2,808,085 (20,870,165) 2,808,085 (18,062,080) 27,352,013 – 27,352,013 772,266 1,500,000 2,272,266 16,398 – 16,398 80,706 – 80,706 (204,549) (50,826) (255,375) 121,369 – 121,369 (202,185) 202,185 – 27,936,018 1,651,359 29,587,377 7,065,853 4,459,444 11,525,297 73,924,787 68,618,955 142,543,742 80,990,640$ 73,078,399$ 154,069,039$ Revenue and Changes in Net Position Net (Expenses) -18- THIS PAGE INTENTIONALLY LEFT BLANK FUND FINANCIAL STATEMENTS THIS PAGE INTENTIONALLY LEFT BLANK THIS PAGE INTENTIONALLY LEFT BLANK Street State Aid Reconstruction Construction General Debt Service Capital Project Assets Cash and temporary investments 17,371,112$ 9,731,243$ 3,810,381$ Receivables Delinquent taxes 188,492 – – Special assessments 9,338 2,196,718 288,412 Accounts 81,222 – – Accrued interest 127,355 – – Due from other funds – – – Advances to other funds – – – Due from other governmental units 227,881 – 2,045,443 Prepaids 26,653 – – Total assets 18,032,053$ 11,927,961$ 6,144,236$ Liabilities Accounts payable 269,567$ –$ 23,597$ Contracts payable – – – Accrued salaries payable 872,297 – – Due to other governmental units 143,232 – – Deposits 994,219 1,100 – Unearned revenue – – – Due to other funds – – – Advances from other funds – – – Total liabilities 2,279,315 1,100 23,597 Deferred inflows of resources Unavailable revenue – property taxes 188,492 – – Unavailable revenue – special assessments 9,338 2,196,718 288,412 Unavailable revenue – long-term receivables – – 2,045,443 Total deferred inflows of resources 197,830 2,196,718 2,333,855 Fund balances (deficits) Nonspendable 26,653 – – Restricted – 9,730,143 3,273,558 Committed – – – Assigned 2,269,499 – 513,226 Unassigned 13,258,756 – – Total fund balances (deficits)15,554,908 9,730,143 3,786,784 Total liabilities, deferred inflows of resources, and fund balances 18,032,053$ 11,927,961$ 6,144,236$ CITY OF GOLDEN VALLEY Balance Sheet Governmental Funds December 31, 2021 See notes to basic financial statements -19- Winnetka/ Street Medicine Lake Reconstruction Tax Increment Capital Project Capital Project Nonmajor Totals 5,781,937$ 863,147$ 17,483,806$ 55,041,626$ – – – 188,492 12,017 – 207,717 2,714,202 577,322 – 114,991 773,535 – – – 127,355 – – 183,120 183,120 – – 540,000 540,000 – – 45,941 2,319,265 – – – 26,653 6,371,276$ 863,147$ 18,575,575$ 61,914,248$ 40,182$ –$ 54,870$ 388,216$ 42,549 – 16,203 58,752 – – – 872,297 – – 50,587 193,819 30,125 – 693,467 1,718,911 – – 967,921 967,921 – 250,196 – 250,196 – 1,359,869 – 1,359,869 112,856 1,610,065 1,783,048 5,809,981 – – – 188,492 12,017 – 207,717 2,714,202 – – – 2,045,443 12,017 – 207,717 4,948,137 – – – 26,653 5,094,069 – 4,872,696 22,970,466 – – 161,790 161,790 1,152,334 – 11,550,324 15,485,383 – (746,918) – 12,511,838 6,246,403 (746,918) 16,584,810 51,156,130 6,371,276$ 863,147$ 18,575,575$ 61,914,248$ -20- THIS PAGE INTENTIONALLY LEFT BLANK Total fund balances – governmental funds 51,156,130$ Capital assets used in governmental activities are not financial resources and,therefore,are not reported as assets in governmental funds. Cost of capital assets 205,449,764 Less accumulated depreciation (113,835,594) Long-term liabilities,including bonds and certifications of indebtedness payable,are not due or payable in the current period and,therefore,are not reported as liabilities in governmental funds. Long-term liabilities at year-end consist of: Bonds and certificates of indebtedness payable (57,840,000) Certain receivables (including delinquent taxes,special assessments,and other receivables not collected within 60 days of year-end)are included in net position,but are excluded from fund balances until they are available to liquidate liabilities of the current period.4,948,137 Accrued interest payable is included in net position,but is excluded from fund balances until due and payable.(673,597) Internal service funds are used to charge the costs of employee benefits and vehicle maintenance to individual funds.The assets,liabilities,and deferred outflows/inflows of the internal service funds are included in governmental activities in the Statement of Net Position. Internal service balances included in governmental activities (8,328,462) Add internal service balances allocated to business-type activities 1,915,253 Governmental funds report debt premiums as other financing sources at the time of issuance. Premiums are reported as liabilities in the Statement of Net Position.(1,800,991) Total net position – governmental activities 80,990,640$ Amounts reported for governmental activities in the Statement of Net Position are different because: December 31, 2021 CITY OF GOLDEN VALLEY Reconciliation of the Balance Sheet to the Statement of Net Position Governmental Funds See notes to basic financial statements -21- Street State Aid Reconstruction Construction General Debt Service Capital Project Revenue Ad valorem taxes 20,293,146$ 4,561,461$ –$ Tax increments – – – Special assessments 7,344 668,724 55,552 Franchise taxes – – – Licenses and permits 1,595,716 – – Intergovernmental revenue 56,964 – 477,027 Charges for services 1,292,454 – – Fines and forfeits 127,096 – – Investment income (charges)(63,306) (31,456) (18,349) Other revenue 202,273 – – Total revenue 23,511,687 5,198,729 514,230 Expenditures Current General government 1,710,541 – – Administrative services 2,308,688 – – Casualty insurance 269,420 – – Public safety 7,612,972 – – Physical development 2,095,315 – – Public works 4,499,814 – – Parks and recreation 999,498 – – Capital outlay – – 282,959 Debt service Principal – 5,840,000 145,000 Interest and fiscal charges – 1,002,919 44,031 Total expenditures 19,496,248 6,842,919 471,990 Excess (deficiency) of revenue over expenditures 4,015,439 (1,644,190) 42,240 Other financing sources (uses) Sale of capital assets – – – Bonds issued – – – Premiums on bonds issued – – – Transfers in 30,000 2,350,000 – Transfers (out)(6,167,580) – – Total other financing sources (uses)(6,137,580) 2,350,000 – Net change in fund balances (2,122,141) 705,810 42,240 Fund balances (deficits) Beginning of year 17,677,049 9,024,333 3,744,544 End of year 15,554,908$ 9,730,143$ 3,786,784$ CITY OF GOLDEN VALLEY Statement of Revenue, Expenditures, and Changes in Fund Balances Governmental Funds Year Ended December 31, 2021 See notes to basic financial statements -22- Winnetka/ Street Medicine Lake Reconstruction Tax Increment Capital Project Capital Project Nonmajor Totals –$ –$ 1,291,469$ 26,146,076$ – 780,887 684,261 1,465,148 2,253 – 40,489 774,362 772,266 – – 772,266 – – – 1,595,716 – – 287,740 821,731 – – 141,006 1,433,460 – – – 127,096 (25,350) (1,062) (51,587) (191,110) 135,365 – 146,488 484,126 884,534 779,825 2,539,866 33,428,871 – – 70,457 1,780,998 – – – 2,308,688 – – – 269,420 – – 8,919 7,621,891 – – – 2,095,315 – – – 4,499,814 – – 241,535 1,241,033 4,023,675 – 3,471,637 7,778,271 – – 1,405,000 7,390,000 64,560 64,880 700,811 1,877,201 4,088,235 64,880 5,898,359 36,862,631 (3,203,701) 714,945 (3,358,493) (3,433,760) – – 263,333 263,333 3,420,000 – – 3,420,000 158,440 – – 158,440 650,000 – 3,397,360 6,427,360 – (190,155) (271,810) (6,629,545) 4,228,440 (190,155) 3,388,883 3,639,588 1,024,739 524,790 30,390 205,828 5,221,664 (1,271,708) 16,554,420 50,950,302 6,246,403$ (746,918)$ 16,584,810$ 51,156,130$ -23- THIS PAGE INTENTIONALLY LEFT BLANK Total net change in fund balances – governmental funds 205,828$ Capital outlays are reported in governmental funds as expenditures;however,in the Statement of Activities,the cost of those assets is allocated over the estimated useful lives as depreciation expense. Capital outlays 6,734,018 Depreciation expense (7,593,306) A gain or loss on the disposal or transfer of capital assets,including the difference between the carrying value and any related sale proceeds,is included in the change in net position;however, only the sale proceeds are included in the change in fund balances. Net book value of capital asset disposals (147,464) Issuance or repayment of long-term debt are an other financing source or expenditure,respectively, in the governmental funds,but increases of reduces long-term liabilities in the Statement of Net Position. Debt issued (3,420,000) Debt repaid 7,390,000 Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources.In the Statement of Activities,however, interest expense is recognized as the interest accrues, regardless of when it is due.56,210 Governmental funds report debt issuance premiums as other financing sources at the time of issuance. Premiums are reported as liabilities in the Statement of Net Position.75,431 Certain receivables (including delinquent taxes,special assessments,and other receivables not collected within 60 days of year-end)are included in the change in net position,but are excluded from fund balances until they are available to liquidate liabilities of the current period.1,928,020 Internal service funds are used to charge the costs of employee benefits and vehicle maintenance to individual funds.The net revenue/expense of certain activities of internal service funds is reported with governmental activities in the Statement of Activities. Internal service fund activity included in governmental activities 2,285,531 Add back internal service fund activity allocated to business-type activities (448,415) Change in net position – governmental activities 7,065,853$ Amounts reported for governmental activities in the Statement of Activities are different because: CITY OF GOLDEN VALLEY Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund Balances to the Statement of Activities Governmental Funds Year Ended December 31, 2021 See notes to basic financial statements -24- THIS PAGE INTENTIONALLY LEFT BLANK Original Final Over (Under) Budget Budget Actual Final Budget Revenue Ad valorem taxes 20,151,285$ 20,151,285$ 20,293,146$ 141,861$ Special assessments 6,000 6,000 7,344 1,344 Licenses and permits 1,242,895 1,242,895 1,595,716 352,821 Intergovernmental revenue 38,685 38,685 56,964 18,279 Charges for services 1,550,210 1,550,210 1,292,454 (257,756) Fines and forfeits 165,000 165,000 127,096 (37,904) Investment income (charges)150,000 150,000 (63,306) (213,306) Other revenue 198,620 198,620 202,273 3,653 Total revenue 23,502,695 23,502,695 23,511,687 8,992 Expenditures Current General government 1,932,560 1,724,275 1,710,541 (13,734) Administrative services 2,271,430 2,289,175 2,308,688 19,513 Casualty insurance 350,000 350,000 269,420 (80,580) Public safety 8,411,230 8,520,485 7,612,972 (907,513) Physical development 2,129,745 2,166,025 2,095,315 (70,710) Public works 4,449,405 4,481,650 4,499,814 18,164 Parks and recreation 1,270,745 1,283,505 999,498 (284,007) Total expenditures 20,815,115 20,815,115 19,496,248 (1,318,867) Excess of revenue over expenditures 2,687,580 2,687,580 4,015,439 1,327,859 Other financing sources (uses) Transfers in 30,000 30,000 30,000 – Transfers (out)(2,717,580) (2,717,580) (6,167,580) (3,450,000) Total other financing sources (uses)(2,687,580) (2,687,580) (6,137,580) (3,450,000) Net change in fund balances –$ –$ (2,122,141) (2,122,141)$ Fund balances Beginning of year 17,677,049 End of year 15,554,908$ CITY OF GOLDEN VALLEY Statement of Revenue, Expenditures, and Changes in Fund Balances General Fund – Budget and Actual Year Ended December 31, 2021 See notes to basic financial statements -25- Storm Sewer Brookview Motor Vehicle Utility Utility Operating Operating Assets Current assets Cash and temporary investments 16,304,233$ 11,558,787$ 1,748,148$ 390,431$ Receivables Special assessments 341,337 – – – Accounts 2,093,601 94,523 99 71,677 Allowance for uncollectibles (21,947) – – – Due from other governmental units – – – – Due from other funds – 424,432 – – Inventory – –– – Prepaids 224,377 148,477 – 440 Total current assets 18,941,601 12,226,219 1,748,247 462,548 Noncurrent assets Advances to other funds – 1,703,869 – – Net pension asset – fire relief – –– – Capital assets Land – 45,999 857,044 – Land improvements 30,054 – 3,325,968 – Buildings and improvements 602,827 – 205,798 – Machinery and equipment 2,574,422 1,082,739 1,394,069 26,934 Infrastructure – distribution and collection systems 26,715,457 30,889,429 – – Construction in progress 1,023,604 4,492,943 – – Total capital assets 30,946,364 36,511,110 5,782,879 26,934 Less accumulated depreciation (15,237,444) (10,718,839) (4,165,190) (24,617) Capital assets, net 15,708,920 25,792,271 1,617,689 2,317 Total noncurrent assets 15,708,920 27,496,140 1,617,689 2,317 Total assets 34,650,521 39,722,359 3,365,936 464,865 Deferred outflows of resources Pension plan deferments – PERA – – – – Pension plan deferments – fire relief – – – – OPEB plan deferments – – – – Total deferred outflows of resources – – – – Total assets and deferred outflows of resources 34,650,521$ 39,722,359$ 3,365,936$ 464,865$ Business-Type Activities – Enterprise Funds CITY OF GOLDEN VALLEY Statement of Net Position Proprietary Funds December 31, 2021 See notes to basic financial statements -26- Governmental Activities Recycling Totals Internal Service 1,316,033$ 31,317,632$ 3,074,024$ – 341,337 – – 2,259,900 11,992 – (21,947) – – – 18,064 – 424,432 – – – 124,033 – 373,294 – 1,316,033 34,694,648 3,228,113 – 1,703,869 – – – 3,119,062 – 903,043 – – 3,356,022 – – 808,625 – – 5,078,164 263,971 – 57,604,886 – – 5,516,547 – – 73,267,287 263,971 – (30,146,090)(231,516) – 43,121,197 32,455 – 44,825,066 3,151,517 1,316,033 79,519,714 6,379,630 – – 8,004,756 – – 372,034 – – 392,244 – – 8,769,034 1,316,033$ 79,519,714$ 15,148,664$ -27-(continued) Storm Sewer Brookview Motor Vehicle Utility Utility Operating Operating Liabilities Current liabilities Accounts payable 62,115$ 43,290$ 213,299$ 324$ Contracts payable 15,896 31,812 – – Accrued interest payable – 24,460 – – Accrued compensated absences – current – –– – Due to other governmental units 201,082 6,814 33,399 – Due to other funds 357,356 – – – Deposits 77,850 154,294 2,468 – Bonds payable – current – 125,000 – – Total current liabilities 714,299 385,670 249,166 324 Noncurrent liabilities Advances from other funds 884,000 – – – Accrued compensated absences – – – – Net pension liability – PERA – – – – Total OPEB liability – – – – Bonds payable – long-term – 2,246,460 – – Total noncurrent liabilities 884,000 2,246,460 – – Total liabilities 1,598,299 2,632,130 249,166 324 Deferred inflows of resources Pension plan deferments – PERA – – – – Pension plan deferments – fire relief – – – – OPEB plan deferments – – – – Total deferred inflows of resources – – – – Net position Net investment in capital assets 15,708,920 23,420,811 1,617,689 2,317 Restricted for fire relief pensions – – – – Unrestricted 17,343,302 13,669,418 1,499,081 462,224 Total net position 33,052,222 37,090,229 3,116,770 464,541 Total liabilities, deferred inflows of resources, and net position 34,650,521$ 39,722,359$ 3,365,936$ 464,865$ Total net position – enterprise funds Adjustment to reflect the consolidation of internal service fund activity related to enterprise funds Net position – business-type activities CITY OF GOLDEN VALLEY Statement of Net Position (continued) Proprietary Funds December 31, 2021 Business-Type Activities – Enterprise Funds See notes to basic financial statements -28- Governmental Activities Recycling Totals Internal Service 39,329$ 358,357$ 7,221$ – 47,708 – – 24,460 – – – 1,338,288 6,814 248,109 – – 357,356 – – 234,612 33,995 – 125,000 – 46,143 1,395,602 1,379,504 – 884,000 – – – 297,891 – – 7,401,796 – – 1,873,222 – 2,246,460 – – 3,130,460 9,572,909 46,143 4,526,062 10,952,413 – – 10,736,197 – – 1,229,619 – – 558,897 – – 12,524,713 – 40,749,737 32,455 – –2,261,477 1,269,890 34,243,915 (10,622,394) 1,269,890 74,993,652 (8,328,462) 1,316,033$ 79,519,714$ 15,148,664$ 74,993,652$ (1,915,253) 73,078,399$ -29- Storm Sewer Brookview Motor Vehicle Utility Utility Operating Operating Operating revenue Charges for services 11,198,718$ 2,592,294$ 1,773,602$ 317,229$ Sales and rentals 4,990 – 2,153,529 – Total operating revenue 11,203,708 2,592,294 3,927,131 317,229 Operating expenses Enterprise operations 8,765,745 862,192 3,248,081 489,395 Other services – – – – Depreciation 1,009,976 1,130,250 128,650 2,532 Total operating expenses 9,775,721 1,992,442 3,376,731 491,927 Operating income (loss)1,427,987 599,852 550,400 (174,698) Nonoperating revenue (expense) Franchise taxes 1,500,000 – – – Intergovernmental revenue – (22,671) – – Investment income (charges)(66,344) 29,130 (6,028) (1,875) Other income – 300 3,665 17 Gain on sale of capital assets 7,075 20,000 17,335 – Interest expense (39,762) (57,293) – – Total nonoperating revenue (expense)1,400,969 (30,534) 14,972 (1,858) Income (loss) before capital contributions and transfers 2,828,956 569,318 565,372 (176,556) Transfers in – 240,155 – – Transfers (out)– –(7,970) (30,000) Change in net position 2,828,956 809,473 557,402 (206,556) Net position Beginning of year 30,223,266 36,280,756 2,559,368 671,097 End of year 33,052,222$ 37,090,229$ 3,116,770$ 464,541$ Change in net position – enterprise funds Adjustment to reflect the consolidation of internal service fund activities related to the enterprise funds Change in net position – business-type activities Business-Type Activities – Enterprise Funds CITY OF GOLDEN VALLEY Statement of Revenue, Expenses, and Changes in Net Position Proprietary Funds Year Ended December 31, 2021 See notes to basic financial statements -30- Governmental Activities Recycling Totals Internal Service 501,335$ 16,383,178$ 10,900,644$ – 2,158,519 – 501,335 18,541,697 10,900,644 526,822 13,892,235 – – – 9,102,118 – 2,271,408 27,318 526,822 16,163,643 9,129,436 (25,487) 2,378,054 1,771,208 – 1,500,000 – 39,888 17,217 522,262 (5,709) (50,826) (13,439) 13,062 17,044 – – 44,410 5,500 – (97,055) – 47,241 1,430,790 514,323 21,754 3,808,844 2,285,531 – 240,155 – – (37,970) – 21,754 4,011,029 2,285,531 1,248,136 70,982,623 (10,613,993) 1,269,890$ 74,993,652$ (8,328,462)$ 4,011,029$ 448,415 4,459,444$ -31- Storm Sewer Brookview Motor Vehicle Utility Utility Operating Operating Cash flows from operating activities Receipts from customers and users 11,065,391$ 2,894,418$ 3,940,699$ 251,678$ Receipts from interfund services provided – – – – Paid to suppliers/service providers (7,389,537) (516,616) (1,070,854) (34,450) Paid to employees (1,368,434) (416,158) (1,958,355) (425,566) Payments for interfund services (275,000) (200,000) (85,000) (30,000) Net cash flows from operating activities 2,032,420 1,761,644 826,490 (238,338) Cash flows from capital and related financing activities Acquisition of capital assets (1,296,724) (1,146,973) (75,159) – Repayment of advances (353,525) 372,956 – – Interest (paid) received on advances (39,762) 82,023 – – Transfers in for capital purposes – 240,155 – – Proceeds from sale of capital assets 7,075 20,000 17,335 – Principal paid on capital debt – (120,000) – – Interest paid on capital debt – (60,350) – – Net cash flows from capital and related financing activities (1,682,936) (612,189) (57,824) – Cash flows from investing activities Interest received (charged) on investments (66,344) (52,893) (6,028) (1,875) Cash flows from noncapital financing activities Operating grants – (22,671) – – Franchise taxes 1,500,000 – – – Transfers (out)– – (7,970) (30,000) Net cash flows from noncapital financing activities 1,500,000 (22,671) (7,970) (30,000) Net increase (decrease) in cash and temporary investments/cash equivalents 1,783,140 1,073,891 754,668 (270,213) Cash and temporary investments/cash equivalents Beginning of year 14,521,093 10,484,896 993,480 660,644 End of year 16,304,233$ 11,558,787$ 1,748,148$ 390,431$ CITY OF GOLDEN VALLEY Business-Type Activities – Enterprise Funds Year Ended December 31, 2021 Proprietary Funds Statement of Cash Flows See notes to basic financial statements -32- Governmental Activities Recycling Totals Internal Service 514,397$ 18,666,583$ 1,985,226$ – – 8,891,585 (466,764) (9,478,221) (7,439,545) – (4,168,513) (3,454,221) (51,500) (641,500) – (3,867) 4,378,349 (16,955) – (2,518,856) – – 19,431 – – 42,261 – – 240,155 – – 44,410 5,500 – (120,000) – – (60,350) – – (2,352,949) 5,500 (5,709) (132,849) (13,439) 39,888 17,217 522,262 – 1,500,000 – – (37,970) – 39,888 1,479,247 522,262 30,312 3,371,798 497,368 1,285,721 27,945,834 2,576,656 1,316,033$ 31,317,632$ 3,074,024$ -33-(continued) Storm Sewer Brookview Motor Vehicle Utility Utility Operating Operating Reconciliation of operating income (loss) to net cash flows from operating activities Operating income (loss)1,427,987$ 599,852$ 550,400$ (174,698)$ Adjustments to reconcile operating income (loss) to net cash flows from operating activities Depreciation 1,009,976 1,130,250 128,650 2,532 Other income – 300 3,665 17 Changes in assets, liabilities, and deferred outflows/inflows Special assessments receivable (25,849) – – – Accounts receivable (112,468) (94,523) 9,903 (65,568) Due from other governmental units – 396,347 – – Inventory 15,631 – 8,384 – Prepaids (220,225) (148,377) 165 (440) Net pension asset – fire relief – – – – Deferred outflows – pension and OPEB plans – – – – Accounts payable 53,005 38,417 90,862 (181) Contracts payable (277,537) (136,596) – – Due to other governmental units 184,129 (5,110) 32,961 – Deposits (22,229) (18,916) 1,500 – Accrued compensated absences – – – – Net pension liability – PERA – – – – Total OPEB liability – – – – Deferred inflows – pension and OPEB plans – – – – Net cash flows from operating activities 2,032,420$ 1,761,644$ 826,490$ (238,338)$ Schedule of noncash capital and related financing activities Amortization of debt premiums –$ 2,057$ –$ –$ Business-Type Activities – Enterprise Funds CITY OF GOLDEN VALLEY Statement of Cash Flows (continued) Proprietary Funds Year Ended December 31, 2021 See notes to basic financial statements -34- Governmental Activities Recycling Totals Internal Service (25,487)$ 2,378,054$ 1,771,208$ – 2,271,408 27,318 13,062 17,044 – – (25,849) – – (262,656) (5,769) – 396,347 (18,064) – 24,015 (17,537) – (368,877) 108,415 – –(707,899) – –(5,324,026) 13,668 195,771 (2,169) – (414,133) – (5,110) 206,870 (3,054) – (39,645) 23,476 – –(226,878) – –(3,720,021) – –217,657 – –7,860,388 (3,867)$ 4,378,349$ (16,955)$ –$ 2,057$ –$ -35- THIS PAGE INTENTIONALLY LEFT BLANK CITY OF GOLDEN VALLEY Notes to Basic Financial Statements December 31, 2021 -36- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES A.Organization The City of Golden Valley, Minnesota (the City) operates under “Optional Plan B” as defined in Minnesota Statutes, Chapter 412. Under this plan, the government of the City is run by a council composed of an elected mayor and four councilmembers. The City Council exercises legislative authority and determines all matters of policy. The city manager, who is appointed by the City Council, is responsible for the proper administration of all affairs relating to the City. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governmental units. B.Reporting Entity As required by accounting principles generally accepted in the United States of America, these financial statements include the City (the primary government) and its component units. Component units are legally separate entities for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit includes whether or not the primary government appoints the voting majority of the potential component unit’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. As a result of applying these criteria, certain organizations have been included or disclosed in this report as follows: 1.Blended Component Unit – The Golden Valley Housing and Redevelopment Authority (HRA) is a legally separate organization created in accordance with Minnesot a Statutes § 469. Its purpose is to clear and redevelop blighted areas in the City and to provide adequate housing for low and moderate-income residents. The HRA is fiscally dependent upon the City, its governing board consists of the City’s mayor and councilmembers, and the City’s management has operational responsibility for the HRA. Therefore, the HRA has been reported as a blended component unit of the City, with its funds reported as funds of the City. 2.Joint Ventures – The City participates in two joint ventures: the Bassett Creek Water Management Commission and the Joint Water Commission (JWC). Descriptions and condensed financial information for these organizations are included later in these notes. 3.Jointly Governed Organization – The City is a member of Local Governmental Information Systems (LOGIS), a consortium of Minnesota municipalities that provides data processing services and support to its members. LOGIS is a legally separate entity that is financially independent of the City. Further, the City does not appoint a voting majority of LOGIS’ Board of Directors. Therefore, it has not been incorporated into the City’s reporting entity. During the 2021 fiscal year, the City paid LOGIS $718,430 for services provided. -37- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C.Government-Wide Financial Statements The government-wide financial statements (Statement of Net Position and Statement of Activities) display information about the reporting government as a whole. These statements include all of the financial activities of the City. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which significantly rely upon sales, fees, and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses o f a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. 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; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other internally directed revenues are reported as general revenues. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes and special assessments are recognized as revenues in the fiscal year for which they are certified for levy. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. As a general rule, the effect of interfund activity has been eliminated from the government -wide financial statements. However, charges between the City’s enterprise funds and other functions are not eliminated, as that would distort the direct costs and program revenues reported in those functions. Depreciation expense is included in the direct expenses of each function. Interest on long-term debt is considered an indirect expense and is reported separately on the Statement of Activities. D.Fund Financial Statement Presentation Separate fund financial statements are provided for governmental and proprietary funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements. Aggregated information for the remaining nonmajor governmental funds is reported in a single column in the fund financial statements. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this basis of accounting, transactions are recorded in the following manner: 1.Revenue Recognition – Revenue is recognized when it becomes measurable and available. “Measurable” means the amount of the transaction can be determined and “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 coll ected within 60 days after year-end. 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. Grants and similar items are recognized when all eligibility requirements imposed by the provider have been met. Proceeds of long-term debt and acquisitions under capital leases are reported as other financing sources. Major revenue that is susceptible to accrual includes property taxes, special assessments, intergovernmental revenue, charges for services, and interest earned on investments. Major revenue that is not susceptible to accrual includes licenses and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received because it is not measurable until collected. -38- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2.Recording of Expenditures – Expenditures are generally recorded when a liability is incurred, except for principal and interest on long-term debt and other long-term liabilities, which are recognized as expenditures to the extent they have matured. Capital asset acquisitions are reported as capital outlay expenditures in the governmental funds. Proprietary fund financial statements are reported using the economic resources measurement focus and accrual basis of accounting, similar to the government-wide financial statements. 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 City’s enterprise funds and internal service funds are charges to customers for sales and services . The operating expenses for the enterprise funds and internal service funds include the cost of sales and se rvices, administrative expenses, and depreciation on capital assets. All revenues and expenses that do not meet this definition are reported as nonoperating revenues and expenses. Aggregated information for the internal service funds is reported in a single column in the proprietary fund financial statements. Because the principal user of the internal services is the City’s governmental activities, the financial statements of the internal service funds are consolidated into the governmental column when presented in the government-wide financial statements. The cost of these services is reported in the appropriate functional activity. Description of Funds The City reports the following major governmental funds: General Fund – This is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. Street Reconstruction Debt Service Fund – This fund is used to account for the accumulation of resources for, and payment of, debt service on improvement bonds issued to finance the City’s Street Reconstruction Program. State Aid Construction Capital Project Fund – This fund is used to account for state construction aid received to finance qualifying road projects. Street Reconstruction Capital Project Fund – This fund is used to account for financial resources, primarily improvement bond proceeds, to be used for the City’s Street Reconstruction Program. Winnetka/Medicine Lake Tax Increment Capital Project Fund – This fund is used to account for the activity of the City’s Winnetka/Medicine Lake Tax Increment District No. 1508. The City reports the following major proprietary funds: Utility Fund – This fund is used to account for the operation, maintenance, and improvement of the City’s water and sanitary sewer utilities. Storm Sewer Utility Fund – This fund is used to account for the operation, maintenance, and improvement of the City’s storm water drainage system. Brookview Operating Fund – This fund is used to account for the operation, maintenance, and improvement of the City’s 18-hole regulation and 9-hole par three golf course facilities. -39- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Motor Vehicle Operating Fund – This fund is used to account for the operation and maintenance of the City’s Deputy Registrar function. Recycling Fund – This fund is used to account for the operation of the City’s recycling, spring brush pickup, and fall leaf drop-off programs. The City also reports the following fund type: Internal Service Funds – These funds are used to account for the City’s vehicle maintenance operation, workers’ compensation insurance, and payroll benefits. Internal service funds operate in a manner similar to enterprise funds; however, they provide services primarily to other departments within the City. E. Budgets and Budgetary Accounting Each fall, following a truth in taxation public hearing, the City Council adopts a General Fund budget for the following fiscal year beginning January 1. The budget is prepared on a modified accrual basis of accounting. The City has established budgetary control at the division level. City management may transfer appropriations within divisions but needs City Council approval before exceeding the budget at that level. Appropriations lapse at year-end; however, the City Council may approve the carryover of specific amounts. F. Cash, Cash Equivalents, and Investments Cash balances from all funds are combined and invested to the extent available in short-term investments. Earnings from the pooled investments are allocated to the individual funds based on the average monthly cash and investment balances of the respective funds. Certain bond proceeds may be held separately for capital projects. Earnings on these accounts are allocated directly to the respective funds. For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase of three months or less to be cash equivalents. The proprietary funds’ portion of the government-wide cash and investment pool is considered to be cash equivalent. The City generally reports investments at fair value other than for certain investment pools that are valued at amortized cost. The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. 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; and Level 3 inputs are significant unobservable inputs. Debt securities classified in Level 2 of the fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. See Note 2 for the City’s recurring fair value measurements as of the current year-end. G. Receivables Utility and miscellaneous accounts receivable are reported at gross. Since the City is generally able to certify delinquent amounts to the county for collection as special assessments, no allowance for uncollectible accounts has been provided on current receivables. The City does record an allowance for the amount of utility receivables that remain delinquent after having been certified to the county. -40- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H.Property Taxes Property tax levies are set by the City Council in December of each year and are certified to Hennepin County for collection in the following year. In Minnesota, counties act as collection agents for all property taxes. The county spreads 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. Property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. The county provides tax settlements to cities and other taxing districts three times a year; in July, December, and January. Property taxes are 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. I.Special Assessments Special assessments represent the financing for public improvements paid for by benefiting property owners. Special assessments are recorded as receivables upon certification to the county. Special assessments are recognized as revenue in the year levied in the government-wide financial statements and proprietary fund financial statements. In the governmental fund financial statements, special assessments are recognized as revenue when received in cash or within 60 days after year -end. Governmental fund special assessments receivable which remain unpaid on December 31 are offset by a deferred inflow of resources in the governmental fund financial statements. Special assessments receivable at year-end consists of the following: Allowance for Net of Delinquent Deferred Total Uncollectible Allowance Governmental funds General 1,114$ 8,224$ 9,338$ –$ 9,338$ Street Reconstruction Debt Service 5,789 2,190,929 2,196,718 – 2,196,718 State Aid Reconstruction Capital Project – 288,412 288,412 – 288,412 Street Reconstruction Capital Project – 12,017 12,017 – 12,017 Nonmajor – 207,717 207,717 – 207,717 Total governmental funds 6,903 2,707,299 2,714,202 – 2,714,202 Enterprise funds Utility 21,947 319,390 341,337 (21,947) 319,390 Total 28,850$ 3,026,689$ 3,055,539$ (21,947)$ 3,033,592$ Special Assessments Receivable J.Interfund Receivables and Payables In the fund financial statements, activity between funds that is representative of lending or borrowing arrangements is reported as either “due to/from other funds” (current portion) or “advances to/from other funds.” All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” -41- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Prepaids Certain cash payments to vendors reflect costs applicable to future periods and are recoded as prepaids in both the government-wide and fund financial statements. Governmental fund prepaids are recorded as expenditures when consumed. L. Inventories Proprietary fund inventories are stated at cost (for supplies) or the lower of cost or market (for resale merchandise) on the first-in, first-out basis. Inventory in the internal service funds consists of parts, supplies, and gasoline for the maintenance of city-owned vehicles. M. Capital Assets Capital assets, which include property, buildings, improvements, equipment, and infrastructure assets (roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Such assets are capitalized at historical cost or estimated historical cost for assets where actual historical cost is not available. Donated assets are recorded as capital assets at their estimated acquisition value on the date of donation. The City defines capital assets as those with an initial, individual cost of $5,000 or more with an estimated useful life in excess of one year. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are recorded in the government-wide and proprietary fund financial statements but are not reported in the governmental fund financial statements. Capital assets are depreciated using the straight-line method over their estimated useful lives. Land and construction in progress are not depreciated. Useful lives vary from 10 to 50 years for land improvements and buildings and improvements, 3 to 20 years for machinery and equipment, and 20 to 50 years for infrastructure. N. Deferred Outflows/Inflows of Resources In addition to assets and liabilities, statements of financial position, or balance sheets, will sometimes report deferred outflows or inflows of resources. These separate financial statement elements represent a consumption or acquisition of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) or an inflow of financial resources (revenue) until then. Deferred inflows of resources from unavailable revenue arises only under a modified accrual basis of accounting and, therefore, is only reported in the governmental funds financial statements. The governmental funds report unavailable revenue from three sources: property taxes, special assessments, and long-term receivables. These amounts are deferred and recognized as inflows of resources in the period they become available. Deferred outflows and inflows of resources related to pensions or other post -employment benefits (OPEB) are reported in the government-wide and proprietary fund Statements of Net Position. These deferred outflows and inflows result from differences between expected and actual experience, changes in proportion, assumption changes, differences between projected and actual earnings on plan investments, and contributions to the plan subsequent to the measurement date and before the end of the reporting period. These amounts are deferred and amortized as required under pension or OPEB standards. -42- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O.Long-Term Liabilities In the government-wide and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums or discounts on debt issuances are reported as other financing sources or uses, respectively. P.Compensated Absences Substantially all regular full-time and part-time city employees hired before January 1, 2009 earn vacation and sick leave at various rates based on longevity. Unused vacation may be accumulated up to a maximum of two times the employee’s annual vacation allowance. Unused sick leave may be accumulated up to a maximum of 800 hours. Employees in good standing are paid for any unused vacation time upon termination. After five years of service, employees in good standing are also paid for one-third of any unused sick leave upon termination. Employees hired on or after January 1, 2009 earn personal time off (PTO) rather than vacation and sick leave. PTO may be accumulated up to various maximum amounts as specified by contract. Employees in good standing are paid for any unused PTO upon termination. All such benefits are payable at the employee’s current rate of pay at the time their employment with the City terminates. These benefits are accrued as they vest in the Payroll Benefits Internal Service Fund and are funded as they accrue from the City’s General Fund and enterprise funds. Q.State-Wide Pension Plans 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 the PERA’s fiduciary net position have been determined on the same basis as they are reported by the PERA. 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. R.Risk Management The City is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk pool for its general property and casualty, workers ’ compensation, and other miscellaneous insurance coverage. The LMCIT operates as a common risk management and insurance program for a large number of cities in Minnesota. The City pays an annual premium to the LMCIT for insurance coverage. The LMCIT agreement provides that the trust will be self-sustaining through member premiums and will reinsure through commercial companies for claims in excess of certain limits. The City also carries commercial insurance for certain other risks of loss. Settled claims resulting from these risks did not exceed insurance coverage in any of the last three fiscal years. There were no significant reductions in insurance coverage in the current year. S.Use of Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the amounts reported at the date of the financial statements during the reporting period. Actual results could differ from those estimates. -43- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) T. Fund Balance Classifications In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which amounts in those funds can be spent. These classifications are as follows: • Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items, inventory, and other long-term assets. • Restricted – Consists of amounts related to externally imposed constraints established by creditors, grantors, or contributors; or constraints imposed by state statutory provisions. • Committed – Consists of internally imposed constraints established by resolution of the City Council, which cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action employed to previously commit those amounts. • Assigned – Consists of internally imposed constraints representing amounts intended to be used by the City for specific purposes that do not meet the criteria to be classified as restricted or committed. Assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority. Pursuant to City Council resolution, the City Council is authorized to establish assignments of fund balance. • Unassigned – The residual classification for the General Fund, which also reflects negative residual amounts in other funds. When both restricted and unrestricted resources are available for use, it is the City’s policy to first use restricted resources, and then use unrestricted resources as needed. When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use resources in the following order: 1) committed, 2) assigned, and 3) unassigned. The City’s fund balance policy includes a fund balance goal in the General Fund of maintaining an unassigned fund balance of 60 percent of next year’s adopted General Fund budgeted expenditures. U. Net Position In the government-wide and proprietary fund financial statements, net position represents the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources. Net position is displayed in three components: • Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation, reduced by any outstanding debt attributable to acquire capital assets. • Restricted Net Position – Consists of net position restricted when there are limitations imposed on its use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments. • Unrestricted Net Position – All other elements of net position that do not meet the definition of “restricted” or “net investment in capital assets.” The City applies restricted resources first when an expense is incurred for which both restricted and unrestricted resources are available. -44- NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) V.Net Investment in Capital Assets The City’s net investment in capital assets at year-end is calculated as follows: Governmental Business-Type Activities Activities Total Capital assets, net of depreciation 91,646,625$ 43,121,197$ 134,767,822$ Less applicable Bonds payable (57,840,000) (2,340,000) (60,180,000) Unamortized bond premiums (1,800,991) (31,460) (1,832,451) Add applicable Unspent bond proceeds 30,890 – 30,890 Net investment in capital assets 32,036,524$ 40,749,737$ 72,786,261$ NOTE 2 – CASH AND INVESTMENTS A.Components of Cash and Investments Cash and investments at year-end consist of the following: Deposits 2,327,546$ Investments 87,100,221 Cash on hand 5,515 Total 89,433,282$ B.Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council, including checking accounts and certificates of deposit. The following is considered the most significant risk associated with deposits: Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the financial institution furnishing the collateral. The City has no additional deposit policies addressing custodial credit risk. At year-end, the bank balances of the City’s deposits totaled $4,591,953, all of which were fully covered by federal deposit insurance or collateral held by the City’s agent in the City’s name. -45- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) C. Investments The City has the following investments at year-end: Fair Value Concentration Measurements Risk Investment Type Using No Maturity Less Than 1 1 to 5 Total > 5 Percent U.S. agency securities FHLMC Level 2 –$ –$ 3,691,462$ 3,691,462$ No FFCB Level 2 – – 10,326,242 10,326,242 Yes FHLB Level 2 – – 13,282,603 13,282,603 Yes State and local bonds Level 2 – 494,807 4,972,591 5,467,398 No State and local bonds Level 2 – 2,976,217 13,429,728 16,405,945 No State and local bonds Level 2 – – 5,587,277 5,587,277 No Negotiable certificates of deposit Level 2 – 1,959,886 253,021 2,212,907 No Investment pool/mutual funds 4M Fund N/A 4,236,115 – – 4,236,115 N/A 4M Plus Fund N/A 25,890,272 – – 25,890,272 N/A Total investments 30,126,387$ 5,430,910$ 51,542,924$ 87,100,221$ Credit risk ratings above were provided by nationally recognized rating agencies: Standard and Poor’s, Moody’s, or Fitch. N/A – Not Applicable N/R – Not Rated N/R N/R Credit Risk Maturity Duration in Years Interest Risk – N/R Rating AAA AA AA AAA AA A The Minnesota Municipal Money Market (4M) Fund and 4M Plus Fund are external investment pools regulated by Minnesota Statutes that are not registered with the Securities and Exchange Commission (SEC), but follow the regulatory rules of the SEC. The City’s investment in these funds is measured at the value per share provided by the pool, which are based on an amortized cost method that approximates fair value. There are no restrictions or limitations on withdrawals from the 4M Fund. The 4M Plus Fund requires an initial 14-day investment period, subject to a penalty equal to 7 days of interest on funds withdrawn prior to the 14-day restriction period. Investments are subject to various risks, the following of which are considered the most significant: Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations guaranteed by the United States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or certain Minnesota securities broker-dealers. The City’s investment policies do not further address credit risk. -46- NOTE 2 – CASH AND INVESTMENTS (CONTINUED) Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the counterparty to an investment transaction (typically a broker-dealer) the City would not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City does not have a formal investment policy addressing this risk, but typically limits its exposure by purchasing insured or registered investments, or by control of who holds the securities. Concentration Risk – This is the risk associated with investing a significant portion of the City’s investment (considered 5 percent or more) in the securities of a single issuer, excluding U.S. guaranteed investments (such as treasuries), investment pools, and mutual funds. The City’s investment policies do not limit the concentration of investments. Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate investments resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the greater the risk). The City does not have an investment policy limiting the duration of investments. NOTE 3 – INTERFUND BALANCES AND TRANSFERS A.Interfund Balances The City had the following interfund balances at year-end: Receivable Fund Payable Fund Amount Reason Due from/to other funds Storm Sewer Utility Enterprise Utility Enterprise 174,236$ Current portion of advance (1) Nonmajor governmental Utility Enterprise 183,120 Current portion of advance (2) Storm Sewer Utility Enterprise Winnetka/Medicine Lake Tax Increment Capital Project 77,267 Current portion of advance (3) Storm Sewer Utility Enterprise Winnetka/Medicine Lake Tax Increment Capital Project 172,929 Current portion of advance (4) 607,552 Advances to/from other funds Storm Sewer Utility Enterprise Utility Enterprise 344,000 Advance (1) Nonmajor governmental Utility Enterprise 540,000 Advance (2) Storm Sewer Utility Enterprise Winnetka/Medicine Lake Tax Increment Capital Project 835,000 Advance (3) Storm Sewer Utility Enterprise Winnetka/Medicine Lake Tax Increment Capital Project 524,869 Advance (4) 2,243,869 Total interfund balances reported on fund financial statements 2,851,421$ Net interfund balances between governmental and enterprise funds (886,945)$ Internal service funds activities related to business-type activities 1,915,253 Internal balances reported on government-wide financial statements 1,028,308$ -47- NOTE 3 – INTERFUND BALANCES AND TRANSFERS (CONTINUED) B. Descriptions of Advances 1) In 2014, the Storm Sewer Utility Enterprise Fund advanced $1,720,000 to the Utility Enterprise Fund to finance an emergency water supply project. The advance will be repaid through annual payments due each October 31 from 2015 through 2024, consisting of $172,000 principal plus interest on the outstanding balance at 2.6 percent. Interest for 2021 was $17,143. 2) In 2015, the Capital Improvement Capital Project Fund advanced $1,800,000 to the Utility Enterprise Fund to finance an emergency pipe reconstruction project. The advance will be repaid through annual payments due each October 31 from 2016 through 2025, consisting of $180,000 principal plus interest on the outstanding balance at 2.6 percent. Interest for 2021 was $22,620. 3) In 2016, the Storm Sewer Utility Enterprise Fund advanced $1,000,000 to the Winnetka/Medicine Lake Tax Increment Capital Project Fund. The advance will be repaid through annual payments due each February 1 from 2017 through 2036, consisting of principal at varying amounts plus interest on the outstanding balance at 4.0 percent. Interest for 2021 was $35,333. 4) In 2018, the Storm Sewer Utility Enterprise Fund advanced $1,050,000 to the Winnetka/Medicine Lake Tax Increment Capital Project Fund. The advance will be repaid through semiannual payments due from February 1, 2019 through August 1, 2023, consisting of principal at varying amounts plus interest on the outstanding balance at 4.0 percent. Interest for 2021 was $29,547. C. Interfund Transfers Interfund transfers for the 2021 fiscal year were as follows: Enterprise Fund Street Street Reconstruction Reconstruction Storm Sewer General Debt Service Capital Project Nonmajor Utility Total Governmental funds General –$ 2,350,000$ (1)650,000$ (1)3,117,580$ (2)50,000$ (2)6,167,580$ Winnetka/Medicine Lake Tax Increment Capital Project – – – – 190,155 (3)190,155 Nonmajor – – – 271,810 (4)– 271,810 Enterprise funds Brookview Operating – – – 7,970 (5)– 7,970 Motor Vehicle Operating 30,000 (6)– – – – 30,000 Total 30,000$ 2,350,000$ 650,000$ 3,397,360$ 240,155$ 6,667,515$ (1)Transfer of excess fund balance to call the remaining principal of the 2010A and 2011A Pavement Management Program Bonds. (2)Transfers to finance current or future capital purchases or construction. (3)Transfer for debt service on 2016D Storm Sewer Revenue Bonds. (4)Transfers for equipment purchases and debt service on equipment certificates and 2017B Tax Increment Bonds. (5)Transfer for equipment purchase. (6)Transfer to support General Fund budget. Transfers Out Governmental Funds Transfers In Interfund transfers are eliminated to the extent possible in the government-wide financial statements. -48- NOTE 4 – CAPITAL ASSETS Capital asset activity for the year ended December 31, 2021 was as follows: A.Changes in Capital Assets Used in Governmental Activities Transfers and Beginning Completed of Year Additions Deletions Construction End of Year Capital assets, not depreciated Land 3,527,685$ –$ –$ –$ 3,527,685$ Construction in progress 9,460,651 5,276,969 – – 14,737,620 Total capital assets, not depreciated 12,988,336 5,276,969 – – 18,265,305 Capital assets, depreciated Land improvements 7,843,922 157,139 – – 8,001,061 Buildings and improvements 29,243,836 24,123 – – 29,267,959 Machinery and equipment 16,771,647 1,006,573 (624,043) (95,345) 17,058,832 Infrastructure 132,851,364 269,214 – – 133,120,578 Total capital assets, depreciated 186,710,769 1,457,049 (624,043) (95,345) 187,448,430 Less accumulated depreciation on Land improvements (4,369,598) (304,187) – – (4,673,785) Buildings and improvements (11,654,483) (606,358) – – (12,260,841) Machinery and equipment (8,357,015) (1,272,043) 476,579 95,345 (9,057,134) Infrastructure (82,637,314) (5,438,036) – – (88,075,350) Total accumulated depreciation (107,018,410) (7,620,624) 476,579 95,345 (114,067,110) Net capital assets, depreciated 79,692,359 (6,163,575) (147,464) – 73,381,320 Total capital assets, net 92,680,695$ (886,606)$ (147,464)$ –$ 91,646,625$ B.Changes in Capital Assets Used in Business-Type Activities Transfers and Beginning Completed of Year Additions Deletions Construction End of Year Capital assets, not depreciated Land 857,044$ 45,999$ –$ –$ 903,043$ Construction in progress 3,502,164 2,014,383 – – 5,516,547 Total capital assets, not depreciated 4,359,208 2,060,382 – – 6,419,590 Capital assets, depreciated Land improvements 3,330,859 25,163 – – 3,356,022 Buildings and improvements 808,625 – – – 808,625 Machinery and equipment 4,944,026 174,011 (135,218) 95,345 5,078,164 Infrastructure – distribution and collection systems 57,345,586 259,300 – – 57,604,886 Total capital assets, depreciated 66,429,096 458,474 (135,218) 95,345 66,847,697 Less accumulated depreciation on Land improvements (2,778,133) (52,453) – – (2,830,586) Buildings and improvements (579,661) (23,363) – – (603,024) Machinery and equipment (3,176,195) (415,570) 135,218 (95,345) (3,551,892) Infrastructure – distribution and collection systems (21,380,566) (1,780,022) – – (23,160,588) Total accumulated depreciation (27,914,555) (2,271,408) 135,218 (95,345) (30,146,090) Net capital assets, depreciated 38,514,541 (1,812,934) – – 36,701,607 Total capital assets, net 42,873,749$ 247,448$ –$ –$ 43,121,197$ -49- NOTE 4 – CAPITAL ASSETS (CONTINUED) C.Depreciation Expense by Function Depreciation expense for the year ended December 31, 2021 was charged to the following functions: Governmental activities General government 75,291$ Public safety 526,324 Physical development 12,540 Public works 6,054,380 Parks and recreation 924,771 Capital assets held by the City’s internal service funds – charged to the various functions based on usage of the assets 27,318 Total depreciation expense – governmental activities 7,620,624$ Business-type activities Utility (water and sewer)1,009,976$ Storm sewer utility 1,130,250 Brookview (golf course) operating 128,650 Motor vehicle operating 2,532 Total depreciation expense – business-type activities 2,271,408$ -50- NOTE 5 – LONG-TERM LIABILITIES A.Long-Term Liabilities The City’s long-term liabilities at December 31, 2021 are as follows: Final Balance – Original Issue Interest Rate Issue Date Maturity Date End of Year Governmental activities General obligation special assessment bonds Improvement Bonds of 2012A 1,575,000$ 2.00–3.00%05/15/2012 02/01/2032 570,000$ Improvement Refunding Bonds of 2012C 5,960,000$ 2.00–2.25%05/15/2012 02/01/2025 3,890,000 Improvement Bonds of 2013A 1,735,000$ 1.25–3.00%05/21/2013 02/01/2033 860,000 Improvement Refunding Bonds of 2013B 7,025,000$ 2.00%05/21/2013 02/01/2026 4,205,000 Improvement Bonds of 2014A 2,335,000$ 1.00–3.40%06/19/2014 02/01/2035 1,905,000 Improvement Refunding Bonds of 2014C 3,950,000$ 2.00–4.00%06/19/2014 02/01/2027 3,485,000 Improvement Bonds of 2015A 1,870,000$ 3.00–3.50%07/15/2015 02/01/2036 720,000 Improvement Refunding Bonds of 2015C 6,600,000$ 2.00–2.50%07/15/2015 02/01/2028 5,675,000 Improvement Bonds of 2016A 1,290,000$ 2.00–3.00%07/07/2016 02/01/2037 955,000 Improvement Bonds of 2017A 2,580,000$ 3.00–3.25%07/20/2017 02/01/2038 2,160,000 Improvement Refunding Bonds of 2017A 4,100,000$ 3.00%07/20/2017 02/01/2029 3,710,000 Improvement Refunding Bonds of 2017B 765,000$ 2.00–4.00%07/20/2017 02/01/2028 525,000 Improvement Bonds of 2018A 2,950,000$ 3.00–3.375%06/14/2018 02/01/2038 2,530,000 Improvement Bonds of 2019A 1,770,000$ 3.00–5.00%07/18/2019 02/01/2039 1,690,000 Improvement Bonds of 2021A 3,420,000$ 1.50–3.00%06/03/2021 02/01/2041 3,420,000 36,300,000 General obligation street reconstruction bonds Street Reconstruction Bonds of 2016C 5,630,000$ 2.13–4.00%07/07/2016 02/01/2037 4,715,000 General obligation tax increment bonds Tax Increment Bonds of 2017B 1,170,000$ 2.00–4.00%07/20/2017 02/01/2028 915,000 General obligation state aid street bonds State Aid Street Bonds of 2007A 2,560,000$ 4.00–4.125%03/15/2007 04/01/2027 985,000 Lease revenue bonds 2016C Lease Revenue Bonds (Brookview Community Center)17,410,000$ 2.00–4.00%10/19/2016 02/01/2037 14,925,000 Unamortized premiums 1,800,991 Compensated absences payable 1,636,179 Net pension liability – PERA 7,401,796 Total OPEB liability 1,873,222 Total governmental activity long-term liabilities 70,552,188 Business-type activities General obligation revenue bonds Utility Revenue Bonds of 2016D 2,580,000$ 2.13–3.00%10/19/2016 02/01/2037 2,340,000 Unamortized premiums 31,460 Total business-type activity long-term liabilities 2,371,460 Total government-wide long-term liabilities 72,923,648$ -51- NOTE 5 – LONG-TERM LIABILITIES (CONTINUED) B. Descriptions of Long-Term Liabilities • Special Assessment Bonds – These bonds are payable primarily from special assessments levied on the properties benefiting from the improvements funded by these issues. Any deficiencies in revenue to fund these issues will be provided from general property taxes. • Street Reconstruction Bonds – The general obligation street reconstruction bonds, issued in accordance with Minnesota Statutes § 475.58 to finance the cost of the Douglas Drive Street Reconstruction Project, will be repaid primarily with ad valorem tax levies. • Certificates of Indebtedness – These certificates were issued in accordance with Minnesota Statutes § 412.301 to finance various equipment purchases and were repaid primarily with ad valorem tax levies. The City made the final principal payment on these certificates in 2021. • Tax Increment Bonds – The City has established tax increment financing (TIF) districts and has issued general obligation tax increment bonds in accordance with Minnesota Statutes, § 462.585 and § 273.77. It is anticipated that the tax increment revenues, derived from the captured assessed value of property in the tax increment district, will provide substantially all funds necessary to retire the bond principal and interest. In addition, future tax levies may be placed on the tax ro lls annually as scheduled for supplementary financing. • State Aid Street Bonds – The general obligation state aid street bonds, issued in accordance with Minnesota Statutes § 162.18 to finance various street improvements, will be repaid primarily with state aid. • HRA Lease Revenue Bonds – The 2016C Lease Revenue Bonds were issued to finance the construction of the new Brookview Community Center. The bonds were issued by the HRA, a blended component unit of the City. The funding for the debt is provided through a lease agreement between the City (as lessee) and the HRA (as lessor), that requires the City to make rental payments sufficient to pay the debt service on the bonds. Therefore, this bond issue has been included as an obligation of the City. Title to the facility will transfer to the City upon completion of the lease agreement and repayment of the related debt. • Utility Revenue Bonds – These bonds were issued for improvements or projects that directly benefit the Storm Sewer Utility Enterprise Fund and will be repaid from revenue sources of that fund. • Other Long-Term Liabilities – The City provides its employees with various benefits, including compensated absences, pensions, and OPEB, as described elsewhere in these notes. These benefits are paid from the Payroll Benefits Internal Service Fund. -52- NOTE 5 – LONG-TERM LIABILITIES (CONTINUED) C.Minimum Debt Payments Minimum annual payments to retire bonds and certificates of indebtedness are as follows: Year Ending December 31,Principal Interest Principal Interest Principal Interest 2022 3,840,000$ 874,570$ 240,000 129,762$ 125,000$ 21,363$ 2023 3,920,000 791,466 245,000 124,913 125,000 18,862 2024 4,250,000 722,392 250,000 118,712 125,000 16,363 2025 4,330,000 605,825 260,000 111,063 130,000 12,512 2026 4,325,000 505,626 265,000 103,188 135,000 8,394 2027–2031 9,525,000 1,333,536 1,435,000 412,481 275,000 6,937 2032–2036 4,160,000 511,840 1,655,000 181,575 – – 2037–2041 1,950,000 79,971 365,000 5,475 – – 36,300,000$ 5,425,226$ 4,715,000$ 1,187,169$ 915,000$ 84,431$ Year Ending December 31,Principal Interest Principal Interest Principal Interest 2022 150,000$ 37,538$ 710,000$ 493,800$ 5,065,000$ 1,557,033$ 2023 155,000 31,247 735,000 464,900 5,180,000 1,431,388 2024 160,000 24,750 765,000 434,900 5,550,000 1,317,117 2025 165,000 18,047 795,000 407,675 5,680,000 1,155,122 2026 175,000 11,034 820,000 383,450 5,720,000 1,011,692 2027–2031 180,000 3,712 4,520,000 1,484,825 15,935,000 3,241,491 2032–2036 – – 5,400,000 597,100 11,215,000 1,290,515 2037–2041 – – 1,180,000 17,700 3,495,000 103,146 985,000$ 126,328$ 14,925,000$ 4,284,350$ 57,840,000$ 11,107,504$ TotalLease Revenue Bonds HRA Governmental Activities State Aid Street Bonds General Obligation Governmental Activities General ObligationGeneral Obligation General Obligation Tax Increment BondsSpecial Assessment Bonds Street Reconstruction Bonds Year Ending December 31,Principal Interest 2022 125,000$ 57,450$ 2023 125,000 54,950 2024 130,000 52,400 2025 130,000 49,800 2026 135,000 47,150 2027–2031 715,000 181,697 2032–2036 805,000 85,566 2037 175,000 2,625 2,340,000$ 531,638$ Business-Type Activities Utility Revenue Bonds -53- NOTE 5 – LONG-TERM LIABILITIES (CONTINUED) D. Revenue Pledged Future revenue pledged for the payment of long-term debt is as follows: Percent of Remaining Principal Pledged Use of Total Term of Principal and Interest Revenue Bond Issue Proceeds Type Debt Service Pledge and Interest Paid Received Utility Revenue Bonds,Storm sewer Series 2016D improvements Utility charges 100%2016–2037 2,871,638$ 180,350$ 2,592,294$ Revenue Pledged Current Year E. Changes in Long-Term Debt Beginning Due Within of Year Additions Deletions End of Year One Year Governmental activities G.O. special assessment bonds 38,800,000$ 3,420,000$ 5,920,000$ 36,300,000$ 3,840,000$ G.O. street reconstruction bonds 4,950,000 – 235,000 4,715,000 240,000 G.O. certificates of indebtedness 280,000 – 280,000 – – G.O. tax increment bonds 1,035,000 – 120,000 915,000 125,000 G.O. state aid street bonds 1,130,000 – 145,000 985,000 150,000 HRA lease revenue bonds 15,615,000 – 690,000 14,925,000 710,000 Unamortized premiums 1,876,422 158,440 233,871 1,800,991 – Compensated absences 1,863,057 1,165,889 1,392,767 1,636,179 1,338,288 Net pension liability – PERA 11,121,817 10,073,453 13,793,474 7,401,796 – Total OPEB liability 1,655,565 366,088 148,431 1,873,222 – Total governmental activities 78,326,861 15,183,870 22,958,543 70,552,188 6,403,288 Business-type activities Utility revenue bonds 2,460,000 – 120,000 2,340,000 125,000 Unamortized premiums 33,517 – 2,057 31,460 – Total business-type activities 2,493,517 – 122,057 2,371,460 125,000 Total 80,820,378$ 15,183,870$ 23,080,600$ 72,923,648$ 6,528,288$ F. Conduit Debt Obligations At times, the City has issued various types of revenue bonds to provide financial assistance to private sector, nonprofit, or governmental entities to finance the acquisition or construction of facilities deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private sector entity served by the bond issuance. Neither the City, nor any political subdivision thereof, is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the City’s financial statements. As of December 31, 2021, the following conduit debt issues were outstanding: Number Principal Type of Debt Years Issued of Issues Outstanding Multi-family housing revenue bonds 1999–2006 1 2,514,418$ Governmental/nonprofit revenue bonds 2007–2009 1 418,380 2 2,932,798$ -54- NOTE 6 – COMPONENTS OF FUND BALANCE At December 31, 2021, the City had the following fund balances: Winnetka/ Street State Aid Street Medicine Lake Reconstruction Construction Reconstruction Tax Increment General Debt Service Capital Project Capital Project Capital Project Nonmajor Total Nonspendable Prepaids 26,653$ –$ –$ –$ –$ –$ 26,653$ Restricted Debt service – 9,730,143 – – – 1,970,185 11,700,328 Redevelopment – –– – – 783,977 783,977 Street improvements – –3,273,558 5,094,069 – 1,458,270 9,825,897 Brookview Center – –– – – 368,944 368,944 Lodging tax – –– – – 29,986 29,986 Cemetery maintenance – –– – – 95,627 95,627 DWI enforcement – –– – – 3,761 3,761 VOTF – –– – – 141,392 141,392 Youth recreation – –– – – 20,509 20,509 American Recovery Plan Act – – – – – 45 45 Total restricted – 9,730,143 3,273,558 5,094,069 – 4,872,696 22,970,466 Committed Human service needs – – – – – 161,790 161,790 Assigned Street improvements – – 513,226 1,152,334 – 126,466 1,792,026 Cable improvements – – – – – 401,264 401,264 Park improvements – – – – – 611,250 611,250 Equipment replacement – – – – – 3,491,462 3,491,462 Capital improvements – – – – – 6,919,882 6,919,882 Equipment replacement 45,000 – – – – – 45,000 City-wide DEI training 224,499 – – – – – 224,499 Self-insurance 2,000,000 – – – – – 2,000,000 Total assigned 2,269,499 – 513,226 1,152,334 – 11,550,324 15,485,383 Unassigned 13,258,756 – – – (746,918) – 12,511,838 Total 15,554,908$ 9,730,143$ 3,786,784$ 6,246,403$ (746,918)$ 16,584,810$ 51,156,130$ The City’s fund balance policy includes a goal of maintaining an unassigned fund balance in the General Fund for working capital of 60 percent of the subsequent year’s adopted expenditures. -55- NOTE 7 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN A. Plan Description The City provides post-employment insurance benefits to certain eligible employees through its OPEB Plan, a single-employer defined benefit plan administered by the City. All post-employment benefits are based on contractual agreements with employee groups. Eligibility for these benefits is based on years of service and/or minimum age requirements. These contractual agreements do not include any specific contribution or funding requirements. The Plan does not issue a publicly available financial report. No plan assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. B. Benefits Provided All retirees of the City upon retirement have the option under state law to continue their medical insurance coverage through the City. For members of certain employee groups, the City pays for all or part of the eligible retiree’s premiums for medical and/or dental insurance from the time of retirement until the employee reaches the age of eligibility for Medicare. Benefits paid by the City differ by bargaining unit and date of hire, with some contracts specifying a certain dollar amount per month, and some covering premium costs as defined within each collective bargaining agreement. Retirees not eligible for these city-paid premium benefits must pay the full city premium rate for their coverage. 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 until the retiree reaches Medicare el igibility, 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. For police officers or firefighters disabled in the line-of-duty, Minnesota Statutes require the City to continue payment of the employer’s contribution toward health coverage for the police officer or firefighter and their spouse, if the spouse was covered at the time of disability, until age 65. C. Contributions The required contribution is based on projected pay-as-you-go financing requirements, with additional amounts to prefund benefits as determined periodically by the City. The City’s current year required pay-as-you-go contributions to finance the benefits described in the previous section totaled $148,431. D. Membership Membership in the Plan consisted of the following as of the latest actuarial valuation: Retirees and beneficiaries receiving benefits 7 Active plan members 134 Total members 141 E. Total OPEB Liability of the City The City’s total OPEB liability of $1,873,222 as of year-end was measured as of December 31, 2020 and was determined by an actuarial valuation as of January 1, 2020. -56- NOTE 7 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) F.Actuarial Methods and Assumptions The total OPEB liability was determined using the entry-age normal cost method and the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount rate 2.12% 20-year municipal bond yield 2.12% Inflation rate 2.00% Salary increases 3.25% Healthcare cost trend rate 7.33%, grading to 5.00% over 7 years The actuarial assumptions used in the latest valuation were based on those used to value pension liabilities for Minnesota city employees. The state pension plans base their assumptions on periodic experience studies. Economic assumptions are based on input from a variety of published so urces of historical and projected future financial data. Each assumption was reviewed for reasonableness with the source information, as well as for consistency with the other economic assumptions. Since the Plan is not funded by an irrevocable trust, the discount rate is equal to the 20-year municipal bond yield rate of 2.12 percent, which was set by considering published rate information for 20-year high quality, tax-exempt, general obligation municipal bonds as of the measurement date. The City discount rate used in the prior measurement date was 2.74 percent. Mortality rates were based on the RP-2014 Mortality Tables, adjusted for white collar and mortality improvements using projection Scale MP-2018 from a base year of 2014, as used in the PERA plan for which the employee, retiree, or beneficiary is a participant. The healthcare cost trend rate, mortality tables, and payroll growth rates were updated for changes in recent experience studies and inflationary adjustments since the previous valuation. Future retirees electing coverage is assumed to be 55 percent. Married future retirees electing spouse coverage is assumed to be 40 percent (60 percent for police and fire personnel). G.Changes in the Total OPEB Liability Total OPEB Liability Beginning balance – January 1, 2021 1,655,565$ Changes for the year Service cost 131,927 Interest 48,057 Difference between estimated and actual experience 4,583 Changes of assumptions 122,651 Benefit payments (89,561) Total net changes 217,657 Ending balance – December 31, 2021 1,873,222$ -57- NOTE 7 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) H. Total OPEB Liability Sensitivity to Discount and Healthcare Cost Trend Rate Changes 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: Discount rate Total OPEB liability 2,012,754$ 1,739,443$ 1.12% 3.12% 1% Decrease in 1% Increase in Discount Rate Discount RateDiscount Rate 1,873,222$ 2.12% 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: Healthcare cost trend rate Total OPEB liability 1% Decrease in 1% Increase in Trend Rate Trend Rate 6.33%, decreasing to 8.33%, decreasing to Healthcare Cost Trend Rate 7.33%, decreasing to Healthcare Cost Healthcare Cost $ 1,718,079 $ 2,058,860 4.00% over 7 years 6.00% over 7 years5.00% over 7 years $ 1,873,222 I. Potential Impact of Events Subsequent to Actuarial Valuation on Total OPEB Liability Subsequent to the December 31, 2020 measurement date of the actuarial valuation that determined the City’s reported total OPEB liability of $1,873,222, five additional police officers included in the study as active plan participants became disabled in the line of duty. Using all other data, assumptions, plan provisions, and methods utilized for this actuarial valuation, it was estimated that these additional participant disabilities would increase the reported total OPEB liability by approximately $1,335,310. -58- NOTE 7 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED) J.OPEB Expense and Related Deferred Outflows of Resources and Deferred Inflows of Resources The City recognized OPEB expense of $103,852 in 2021. As of year-end, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 4,088$ 489,352$ Changes in assumptions 239,725 69,545 Contributions subsequent to the measurement date 148,431 – Total 392,244$ 558,897$ Deferred outflows of resources reported $148,431 related to OPEB resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: OPEB Year Ending Expense June 30,Amount 2022 $ (46,085) 2023 $ (46,085) 2024 $ (46,085) 2025 $ (46,085) 2026 $ (46,184) Thereafter $ (84,560) NOTE 8 – PENSION PLANS 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 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 Golden Valley Fire Department Relief Association (the Association). Members of the City Council also participate in the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer defined contribution pension plan administered by the PERA of Minnesota. 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: Golden Valley Fire Department Relief Total GERF PEPFF PEDCP Total Association All Plans Net pension asset –$ –$ –$ –$ 3,119,062$ 3,119,062$ Deferred outflows 3,671,785$ 4,332,971$ –$ 8,004,756$ 372,034$ 8,376,790$ Net pension liability 5,022,047$ 2,379,749$ –$ 7,401,796$ –$ 7,401,796$ Deferred inflows 4,613,297$ 6,122,900$ –$ 10,736,197$ 1,229,619$ 11,965,816$ Pension expense 160,581$ (191,792)$ 1,759$ (29,452)$ (75,362)$ (104,814)$ State-Wide PERA Pension Plans -59- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE A. Plan Descriptions The City participates in the following cost-sharing, multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association (PERA) of Minnesota. The PERA’s defined benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356. The PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code (IRC). 1. General Employees Retirement Fund (GERF) All full-time and certain part-time employees of the City are covered by the GERF. The GERF members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security. 2. Public Employees Police and Fire Fund (PEPFF) The Public Employees Police and Fire Fund (PEPFF), originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to the PERA. B. Benefits Provided The PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statutes 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. GERF Benefits Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for the 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 Plan members is 1.2 percent for each of the first 10 years of service, and 1.7 percent for each additional year. Under Method 2, the accrual rate for Coordinated Plan members is 1.7 percent 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 age 66. -60- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) Benefit increases are provided to benefit recipients each January. The post-retirement increase is equal to 50.0 percent of the cost of living adjustment (COLA) announced by the Social Security Administration, with a minimum increase of at least 1.0 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. 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 in crease. 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. 2.PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 2010 but before July 1, 2014, vest on a prorated basis from 50.0 percent after five years, up to 100.0 percent after 10 years of credited service. Benefits for the PEPFF members first hired after June 30, 2014 vest on a prorated basis from 50.0 percent after 10 years, up to 100.0 percent after 20 years of credited service. The annuity accrual rate is 3.0 percent of average salary for each year of service. For Police and Fire Plan members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. Benefit increases are provided to benefit recipients each January. The post-retirement increase is fixed at 1.0 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. 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. C.Contributions Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the State Legislature. 1.GERF Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2021, and the City was required to contribute 7.50 percent for Coordinated Plan members. The City’s contributions to the GERF for the year ended December 31, 2021, were $665,363. The City’s contributions were equal to the required contributions as set by state statutes. 2.PEPFF Contributions Police and Fire Plan members were required to contribute 11.80 percent of their annual covered salary in fiscal year 2021, and the City was required to contribute 17.70 percent for Police and Fire Plan members. The City’s contributions to the PEPFF for the year ended December 31, 2021, were $607,647. The City’s contributions were equal to the required contributions as set by state statutes. -61- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) D. Pension Costs 1. GERF Pension Costs At December 31, 2021, the City reported a liability of $5,022,047 for its proportionate share of the GERF’s net pension liability. The City’s net pension liability reflected a reduction, due to the state of Minnesota’s contribution of $16.0 million. 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 $153,374. The net pension liability was measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2020 through June 30, 2021, relative to the total employer contributions received from all of the PERA’s participating employers. The City’s proportionate share was 0.1176 percent at the end of the measurement period and 0.1148 percent for the beginning of the period. The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City’s proportionate share of the net pension liability 5,022,047$ State’s proportionate share of the net pension liability associated with the City 153,374$ For the year ended December 31, 2021, the City recognized pension expense of $148,206 for its proportionate share of the GERF’s pension expense. In addition, the City recognized an additional $12,375 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota’s contribution of $16.0 million to the GERF. At December 31, 2021, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 29,700$ 153,265$ Changes in actuarial assumptions 3,066,358 107,965 Net collective difference between projected and actual investment earnings – 4,352,067 Changes in proportion 231,158 – Contributions paid to the PERA subsequent to the measurement date 344,569 – Total 3,671,785$ 4,613,297$ -62- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) A total of $344,569 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending December 31, 2022. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31,Amount 2022 (83,926)$ 2023 (14,666)$ 2024 (1,206)$ 2025 (1,186,283)$ 2.PEPFF Pension Costs At December 31, 2021, the City reported a liability of $2,379,749 for its proportionate share of the PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2021, 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 pensi on liability was based on the City’s contributions received by the PERA during the measurement period for employer payroll paid dates from July 1, 2020 through June 30, 2021, relative to the total employer contributions received from all of the PERA’s participating employers. The City’s proportionate share was 0.3083 percent at the end of the measurement period and 0.3216 percent for the beginning of the period. The state of Minnesota contributed $18.0 million to the PEPFF in the plan fiscal year ended June 30, 2021. The contribution consisted of $9.0 million in direct state aid that does meet the definition of a special funding situation and $9.0 million in supplemental state aid that does not meet the definition of a special funding situation. The $9.0 million direct state aid was paid on October 1, 2020. Thereafter, by October 1 of each year, the state will pay $9.0 million to the PEPFF until full funding is reached or July 1, 2048, whichever is earlier. The $9.0 million in supplemental state aid will continue until the fund is 90.0 percent funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90.0 percent funded, whichever occurs later. Strong asset returns for the fiscal year ended 2021 will accelerate the phasing out of these state contributions, although we do not anticipate them to be phased out during the fiscal year ending 2022. The state of Minnesota is included as a nonemployer contributing entity in the Police and Fire Retirement Plan Schedule of Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules) for the $9.0 million in direct state aid. Police and Fire Plan employers need to recognize their proportionate share of the state of Minnesota’s pension expense (and grant revenue) under GASB 68 special funding situation accounting and financial reporting requirements. For the year ended June 30, 2021, the City recognized negative pension expense of $211,272 for its proportionate share of the Police and Fire Plan’s pension expense. The City recognized $19,480 as grant revenue for its proportionate share of the state of Minnesota’s pension expense for the contribution of $9.0 million to the PEPFF. -63- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City’s proportionate share of the net pension liability 2,379,749$ State’s proportionate share of the net pension liability associated with the City 106,967$ The state of Minnesota is not included as a nonemployer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9.0 million in supplemental state aid. The City recognized $27,747 for the year ended December 31, 2021 as revenue and an offsetting reduction of net pension liability for its proportionate share of the state of Minnesota’s on -behalf contributions to the PEPFF. At December 31, 2021, the City reported its proportionate share of the PEPFF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences between expected and actual economic experience 462,746$ –$ Changes in actuarial assumptions 3,497,608 1,354,266 Net collective difference between projected and actual investment earnings – 4,525,973 Changes in proportion 92,735 242,661 Contributions paid to the PERA subsequent to the measurement date 279,882 – Total 4,332,971$ 6,122,900$ A total of $279,882 reported as deferred outflows of resources related to pensions resulting from city contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ending December 31, 2022. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year Ending Expense December 31,Amount 2022 $ (1,663,021) 2023 $ (315,146) 2024 $ (308,324) 2025 $ (519,797) 2026 $ 736,477 -64- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) E.Long-Term Expected Return on Investments The Minnesota State Board of Investment, which manages the investments of the 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 Domestic equity 33.50 %5.10 % International equity 16.50 5.30 % Fixed income 25.00 0.75 % Private markets 25.00 5.90 % Total 100.00 % Allocation Target Real Rate of Return Long-Term Expected F.Actuarial Assumptions The total pension liability in the June 30, 2021, actuarial valuation was determined using an individual entry-age normal actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total liability is 6.50 percent. This assumption is based on a review of inflation and investments return assumptions from a number of national investment consulting firms. The review provided a range of return investment return rates deemed to be reasonable by the actuary. An investment return of 6.50 percent was deemed to be within that range of reasonableness for financial reporting purposes. Inflation is assumed to be 2.25 percent for the General Employees Plan and 2.25 percent for the Police and Fire Plan. Benefit increases after retirement are assumed to be 1.25 percent for the General Employees Plan. The Police and Fire Plan benefit increase is fixed at 1.00 percent per year and that increase was used in the valuation. Salary growth assumptions in the General Employees Plan range in annual increments from 10.25 percent after one year of service to 3.00 percent after 29 years of service, and 6.00 percent per year thereafter. In the Police and Fire Plan, salary growth assumptions range from 11.75 percent after one year of service to 3.00 percent after 24 years of service. Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. Mortality rates for the Police and Fire Plan are based on the Pub-2010 Public Safety Employee Mortality tables. The tables are adjusted slightly to fit the PERA’s experience. Actuarial assumptions for the General Employees Plan are reviewed every four years. The most recent four-year experience study for the General Employees Plan was completed in 2019. The assumption changes were adopted by the Board and became effective with the July 1, 2020 actuarial valuation. The most recent four-year experience study for the Police and Fire Plan was completed in 2020, adopted by the Board, and became effective with the July 1, 2021 actuarial valuation. -65- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) The following changes in actuarial assumptions occurred in 2021: 1. GERF CHANGES IN ACTUARIAL ASSUMPTIONS • The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. • The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2. PEPFF CHANGES IN ACTUARIAL ASSUMPTIONS • The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. • The inflation assumption was changed from 2.50 percent to 2.25 percent. • The payroll growth assumption was changed from 3.25 percent to 3.00 percent. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 Public Safety Mortality table. The mortality improvement scale was changed from MP-2019 to MP-2020. • The base mortality table for disabled annuitants was changed from the RP-2014 healthy annuitant mortality table (with future mortality improvement according to Scale MP -2019) to the Pub-2010 Public Safety disabled annuitant mortality table (with future mortality improvement according to Scale MP-2020). • Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates. • Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result in slightly more unreduced retirements and fewer assumed early retirements. • Assumed rates of withdrawal were changed from select and ultimate rates to service-based rates. The changes result in more assumed terminations. • Assumed rates of disability were increased for ages 25–44 and decreased for ages over 49. Overall, proposed rates result in more projected disabilities. • Assumed percent married for active female members was changed from 60.00 percent to 70.00 percent. Minor changes to form of payment assumptions were applied. G. Discount Rate The discount rate used to measure the total pension liability in 2021 was 6.50 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 GERF and the PEPFF were 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. -66- NOTE 9 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) H.Pension Liability Sensitivity The following table presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: City’s proportionate share of the GERF net pension liability City’s proportionate share of the PEPFF net pension liability 5.50%6.50%7.50% 738,419$ 7,555,302$ (1,862,921)$ 10,242,412$ 2,379,749$ 5,022,047$ 1% Decrease in Discount Rate 1% Increase in Discount RateDiscount Rate I.Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the internet at www.mnpera.org. NOTE 10 – DEFINED CONTRIBUTION PENSION PLAN – STATE-WIDE Councilmembers of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple-employer deferred compensation plan administered by the PERA. The PEDCP is a tax qualified plan under Section 401(a) of the IRC, and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who el ect to participate. An eligible elected official who decides to participate contributes 5.00 percent of their salary, which is matched by the elected official’s employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees, contributions must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, the PERA receives 2.00 percent of employer contributions and 25 hundredths of 1.00 percent (0.25 percent) of the assets in each member’s account annually. Total contributions made by the City during fiscal year 2021 were: Required Rate for Employees Employee Employer Employee Employer and Employers 1,759$ 1,759$ 5.00%5.00%5.00% Contribution Amount Percentage of Covered Payroll -67- NOTE 11 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION A. Plan Description All members of the Golden Valley Fire Department (the Department) are covered by a defined benefit plan administered by the Association. As of December 31, 2020, the measurement date of the most recent actuarial valuation, the plan covered 48 active firefighters and 7 vested terminated firefighters whose pension benefits are deferred. The plan is a single-employer retirement plan and is established and administered in accordance with Minnesota Statutes, Chapter 69. The Association maintains a separate Special Fund to accumulate assets to fund the retirement benefits earned by the Department’s membership. Funding for the Association is derived from an insurance premium tax in accordance with the Volunteer Firefighter’s Relief Association Financing Guidelines Act of 1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980). Funds are also derived from investment income. B. Benefits Provided A firefighter who completes at least 20 years as an active member of the Department is entitled, after age 50, to a full service pension upon retirement. The bylaws of the Association also provide for an early vested service pension for a retiring member who has completed fewer than 20 years of service. The reduced pension, available to members with 10 years of service, shall be equal to 60 percent of the pension as described by the bylaws. This percentage increases 4 percent per year so that at 20 years of service, the full amount prescribed is paid. Members who retire with less than 20 years of service and have reached the age of 50 years, and have completed at least 10 years of active membership, are entitled to a reduced service pension not to exceed the amount calculated by multiplying the member’s service pension for the completed years of service times the applicable nonforfeitable percentage of pension. C. Contributions Minnesota Statutes, Chapters 424 and 424A authorize pension benefits for volunteer fire relief associations. The plan is funded by fire state aid, investment earnings, and, if necessary, employer contributions as specified in Minnesota Statutes and voluntary city contributions (if applicable). Required employer contributions are calculated annually based on statutory provisions. The City’s statutorily-required contributions to the plan for the year ended December 31, 2021, were $0. The City’s contributions were equal to the required contributions as set by state statutes. The City made no voluntary contributions to the plan. Furthermore, the firefighter has no obligation to contribute to the plan. For the year ended December 31, 2021, the City recognized negative pension expense of $75,362. The City also recognized $187,368 as revenue for the state of Minnesota’s on-behalf contributions to the Department. -68- NOTE 11 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) D.Pension Costs At December 31, 2021, the City reported a net pension liability (asset) of ($3,119,062) for the plan. The net pension liability (asset) was measured as of December 31, 2020. The total pension liability used to calculate the net pension liability (asset) in accordance with GASB Statement No. 68 was determined by applying an actuarial formula to specific census data certified by the Department as of December 31, 2020. The following table presents the changes in net pension liability (asset) during the year: Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (Asset) (a) (b) (a-b) Beginning balance – January 1, 2021 3,139,277$ 5,550,440$ (2,411,163)$ Changes for the year Service cost 183,925 –183,925 Interest on pension liability (asset)198,850 –198,850 Difference between expected and actual experience (183,732) –(183,732) Changes in assumptions 38,609 –38,609 Changes in benefit terms 120,267 –120,267 Contributions (state and local)–187,368 (187,368) Net investment income –893,892 (893,892) Benefit payments, including member contribution refunds (754,557) (754,557) – Administrative costs –(15,442) 15,442 Total net changes (396,638) 311,261 (707,899) Ending balance – December 31, 2021 2,742,639$ 5,861,701$ (3,119,062)$ At December 31, 2021, the City reported deferred inflows of resources and deferred outflows of resources related to pensions from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Difference between expected and actual liability 86,793$ 251,469$ Change of assumptions 90,046 19,003 Net difference between projected and actual earnings on plan investments –763,952 State aid to the City subsequent to the measurement date 195,195 195,195 Total 372,034$ 1,229,619$ -69- NOTE 11 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) Deferred outflows and inflows of resources totaling $195,195 related to pensions resulting from the City’s contributions of state aid received and passed through to the plan subsequent to the measurement date will be recognized in the year ending December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to the plan will be recognized in pension expense as follows: Pension Year Ending Expense December 31,Amount 2022 (245,421)$ 2023 (147,009)$ 2024 (274,574)$ 2025 (117,092)$ 2026 (4,826)$ Thereafter (68,663)$ E. Actuarial Methods and Assumptions The total pension liability at December 31, 2020 was determined using the entry-age normal actuarial cost method and the following actuarial assumptions: Retirement eligibility at 100 percent service pension at age 50 with 20 years of service,early vested retirement at age 50 with 10 years of service,vested at 60 percent and increased by 4 percent for each additional year of service up to 20,and eligibility for deferred service pension payable at age 50 with 20 years of service Inflation rate 2.25% per year Cost of living increases zero percent per year Investment rate of return 6.50% 20-year municipal bond yield 2.00% Plan changes since the prior valuation include an increase in the annual lump sum pension benefit from $8,700 to $9,200, effective September 15, 2020. Changes in actuarial assumptions since the prior valuation include: • The expected investment return and discount rate decreased from 6.75 percent to 6.50 percent to reflect updated market assumptions. • The mortality assumptions were updated from the rates used in the July 1, 2018 Minnesota PERA PEPFF actuarial valuation to the ratios used in the July 1, 2020 Minnesota PERA PEPFF actuarial valuation. • The inflation assumption decreased from 2.50 percent to 2.25 percent. -70- NOTE 11 – DEFINED BENEFIT PENSION PLAN – FIRE RELIEF ASSOCIATION (CONTINUED) The 6.50 percent 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 inflation) were developed for each asset class us ing the plan’s target investment allocation, along with long-term return expectations by asset class. Inflation expectations were applied to derive the nominal rate of return for the portfolio. 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 Domestic equity 68.12 %4.90 %7.15 % International equity 10.72 5.32 7.57 Fixed income 16.99 1.40 3.65 Real estate and alternatives 0.07 4.43 6.68 Cash and equivalents 4.10 0.09 0.23 Total 100.00 %6.50 % Allocation Target Rate of Return Expected Nominal Long-TermLong-Term Expected Real Rate of Return F.Discount Rate The discount rate used to measure the total pension liability was 6.50 percent. The projection of cash flows used to determine the discount rate assumed that contributions to the plan will be made as specified in state statutes. Based on that assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive 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. G.Pension Liability (Asset) Sensitivity The following presents the City’s net pension liability (asset) for the plan, calculated using the discount rate disclosed in the preceding page, as well as what the City’s net pension liability (asset) would be if it were calculated using a discount rate 1 percent lower or 1 percent higher than the current discount rate: 1% Decrease in 1% Increase in Discount Rate Discount Rate Discount Rate 5.50%6.50%7.50% Net pension liability (asset)(3,017,307)$ (3,119,062)$ (3,217,185)$ H.Pension Plan Fiduciary Net Position The Association issues a publicly available financial report that includes financial statements and required supplementary information. This report may be obtained at the Golden Valley City Hall. -71- NOTE 12 – FLEXIBLE BENEFIT PLAN The City offers three types of flexible spending accounts: medical premiums, medical expenses, and dependent care expenses. Eligible employees can elect to participate by contributing pretax dollars withheld from payroll checks to the plan for healthcare and dependent care benefits. Payments are made from the plan to participating employees upon submitting a request for reimbursement of eligible expenses actually incurred by the participant. Before the beginning of the plan year, which is from January 1 to December 31, each participant designates a total amount of pretax dollars to be contributed to the plan during the year . For the medical expense account, the City is contingently liable for claims against the total amount of participants’ annual contributions to the plan, whether or not such contributions have been made. All plan activity is recorded in the City’s General Fund. Assets of the plan are held in the City’s payroll checking account. Amounts withheld to pay for employee medical insurance premiums are administered and paid out directly by the City’s finance department. Medical expense and dependent care expense accounts are administered by the Stanton Group—a benefit consulting firm. Claims are made directly to the Stanton Group by plan participants. The Stanton Group then reimburses the participants and bills the City for these reimbursements. All plan property and income attributable to that property is solely the property of the City subject to the claims of the City’s general creditors. Participants’ rights under the plan are equal to those of general creditors of the City in an amount equal to the eligible healthcare and dependent care expenses incurred by the participants. The City believes it unlikely that it will use the assets to satisfy the claims of general creditors in the future. NOTE 13 – TAX INCREMENT FINANCING DISTRICTS AND TAX ABATEMENTS The City is the administering authority for the following TIF districts: North Wirth Highway 55 Cornerstone Winnetka/ Redevelopment West Creek Medicine Lake District No. 1505 District No. 1506 District No. 1507 District No. 1508 Authorizing law M.S. 469 M.S. 469 M.S. 469 M.S. 469 Year established 2004 2013 2015 2015 First tax increment 2005 2017 2018 2018 Duration of district 25 years 15 years 25 years 25 years Tax capacity – taxes payable 2021 Original 6,650$ 53,990$ 8,870$ 51,288$ Current 44,200 526,373 58,808 688,313 Captured – retained 37,550$ 472,383$ 49,938$ 637,025$ G.O. tax increment bonds issued –$ 1,170,000$ –$ –$ Principal payments – 255,000 – – Outstanding at December 31, 2021 –$ 915,000$ –$ –$ The creation of TIF districts as authorized under Minnesota Statutes, Chapter 469.178, is a common economic development vehicle used by the City to spur economic development and redevelopment. In these districts, tax increment revenue is generated on the incremental increase in value of the improved property above a base value established on the date that the TIF district is created, which may be used to assist in financing the improvements to the property within the TIF district. -72- NOTE 13 – TAX INCREMENT FINANCING DISTRICTS AND TAX ABATEMENTS (CONTINUED) The City may enter into private development and redevelopment agreements to encourage the construction, expansion, or improvement of new or existing properties and buildings or clean-up and redevelop blighted areas within these areas. These agreements may in substance be tax abatements depending on their individual circumstances. The City currently has two such agreements that would be considered a tax abatement under GASB Statement No. 77. In 2009, the City entered into a development agreement with a private developer for a property in the North Wirth Redevelopment Tax Increment District. As part of this agreement, the City has agreed to reimburse the developer for certain environmental remediation costs through a pay -as-you-go tax increment note. The note provides for the payment of principal equal to the developer ’s costs, plus interest at 6 percent. Payments of the note will be made at the lesser of the scheduled note payments or the actual net tax increment received during the period specified in the agreement, ending February 1, 2027. The note will be cancelled at the end of the agreement term, whether it has been fully repaid or not. This note is not included in the City’s long-term debt, because repayment is required only to the extent sufficient tax increments are received. The City’s position is that this is an obligation to assign future and uncertain revenue sources and, as such, is not actual debt in-substance. The outstanding principal balance of this note as of December 31, 2021 is $106,541, and tax increment revenue rebated was $31,893 for 2021. In 2015, the City entered into a development agreement with a private developer for a property in the Highway 55 West Tax Increment District. As part of this agreement, the City has agreed to reimburse the developer for certain environmental remediation costs through a pay-as-you-go tax increment note. The note provides for the payment of principal equal to the developer’s costs, plus interest at 5.5 percent. Payments of the note will be made at the lesser of the scheduled note payments or the actual net tax increment received during the period specified in the agreement. The note will be cancelled at the end of the agreement term, whether it has been fully repaid or not. This note is not included in the City’s long-term debt, because repayment is required only to the extent sufficient tax increments are received. The City’s position is that this is an obligation to assign future and uncertain revenue sources and, as such, is not actual debt in-substance. The outstanding principal balance of this note as of December 31, 2021 is $2,065,491 and tax increment revenue rebated was $338,011 for 2021. NOTE 14 – JOINT POWERS AGREEMENTS A.Bassett Creek Water Management Commission The City is a member of a joint powers agreement, together with the cities of Medicine Lake, Plymouth, Robbinsdale, Minneapolis, Minnetonka, New Hope, Crystal, and St. Louis Park, which establishes the authority for the Bassett Creek Water Management Commission (the Commission). The Commission was created to provide for the improvement and development of Bassett Creek as a storm sewer to channel storm waters from member communities to the Mississippi River. Each member city is entitled to appoint one representative to the Commission. The nine-member commission develops a budget for the year each July 1. Each member city contributes funds to cover the budgeted costs of the operations-based half on the assessed valuation of all taxable property, and half on the total area each member city has within the boundaries of the watershed. Any capital costs incurred by the Commission are apportioned to the members-based half on the real property valuation of each member city within the watershed, and half on the total area of each member city within the boundaries of the watershed. -73- NOTE 14 – JOINT POWERS AGREEMENTS (CONTINUED) The following financial information is from the Commission’s audited financial statements for the year ended January 31, 2022, which are available at Golden Valley City Hall: Total assets 7,123,691$ Total liabilities 1,048,385 Net position 6,075,306$ Revenue 2,165,748$ Expenses 1,083,254 Change in net position 1,082,494$ Of the total revenue, $554,900 represented assessments to member cities. The City’s portion was $145,228, or 26.2 percent, of total assessments paid by members. B. Joint Water Commission (JWC) The City is a member of a joint powers agreement, together with the cities of Crystal and New Hope, which established a JWC. The JWC was created in 1963 to provide for the creation and maintenance of a joint water supply, storage, and distribution system through which water purchased from the City of Minneapolis can be supplied to the population of the member cities. Each member city is entitled to appoint one member to the JWC. Original construction costs were allocated to the member cities based on percentages agreed upon in the joint powers agreement. All subsequent operating and maintenance costs are apportioned to and paid by each member city on the basis of water usage. Under the terms of the joint powers agreement, upon termination the accumulated as sets of the JWC shall be divided amongst the member cities in a manner to be determined and unanimously approved by the member cities. Because the manner in which the JWC’s assets would be divided upon termination is not specified, it is not practical for the City to determine its portion of JWC assets. Therefore, the City’s Utility Enterprise Fund does not record any amount as an equity investment or contributed capital (for construction costs paid by other funds) related to the JWC. The following financial information is from the JWC’s audited financial statements for the year ended December 31, 2021, which are available at Golden Valley City Hall: Total assets 20,370,794$ Total liabilities 940,445 Net position 19,430,349$ Revenue 9,851,904$ Expenses 8,851,973 Change in net position 999,931$ Of the total revenues, $9,703,304 represented assessments paid by member cities. Of the total member assessments, $3,757,336, or 38.7 percent, was paid by the City. -74- NOTE 15 – CONTINGENCIES AND COMMITMENTS A.Legal Claims The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although the outcome of these lawsuits is not presently determinable, the City’s management believes that the City will not incur any material monetary loss resulting from these claims. No loss has been recorded on the City’s financial statements relating to these claims. B.Federal and State Receivables Amounts recorded or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. C.Tax Increment Districts The City’s tax increment districts are subject to review by the Office of the State Auditor. Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance, which would have a material effect on the financial statements. D.Construction Commitments At December 31, 2021, the City is committed to various construction contracts for the improvement of city property. The City’s remaining commitment under these contracts is approximately $46,440. NOTE 16 – DEFICIT FUND BALANCES/NET POSITION At December 31, 2021, the Winnetka/Medicine Lake Tax Increment Capital Project Fund reported a deficit fund balance of $746,918. The deficit is due to project costs incurred in advance of funding and will be eliminated through future tax increment revenues and other financing sources. At December 31, 2021, the Payroll Benefits Internal Service Fund reported a deficit net position of $8,996,865. The deficit is due to the fund reporting the City’s proportionate share of net pension liabilities related to two state-wide, cost-sharing, multiple-employer defined benefit pension plans administered by the PERA, as described earlier in these notes. This deficit will be eliminated through the future funding of these liabilities. -75- NOTE 17 – SUBSEQUENT EVENTS A. Debt Issuance In May 2022, the City approved the sale of $3,895,000 of General Obligation Improvement Bonds, Series 2022A, with a final maturity date of February 1, 2042. The bonds will be used to finance the City’s ongoing PMP. B. New Accounting Standards A new standard has been issued by the GASB that will result in significant changes in the reporting of lease transactions once it becomes effective for governmental entities. This standard will be adopted by the City beginning in 2022, and will require the restatement of certain balances reported as of December 31, 2021. The effects of this change have not yet been determined and are not reflected in these financial statements. C. COVID–19 The COVID-19 pandemic has had significant financial and operational impacts on the City for the last two fiscal years. Any potential impact it may have on the City’s future operations and finances cannot be determined at this time and has not been reflected in these financial statements. REQUIRED SUPPLEMENTARY INFORMATION Proportionate Share of the City’s Net Pension Proportionate Liability and City’s Share of the the City’s Proportionate Plan Fiduciary State of Share of the Share of the Net Position City’s City’s Minnesota’s State of Net Pension as a PERA Fiscal Proportion Proportionate Proportionate Minnesota’s Liability as a Percentage Year-End Date of the Net Share of the Share of the Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Net Pension Net Pension Covered Covered Pension Date)Liability Liability Liability Liability Payroll Payroll Liability 06/30/2015 0.1085% 5,623,033$ –$ –$ 6,374,138$ 88.22% 78.20% 06/30/2016 0.1072% 8,704,108$ 113,679$ 8,817,787$ 6,649,482$ 130.90% 68.90% 06/30/2017 0.1107% 7,067,015$ 88,825$ 7,155,840$ 7,128,621$ 99.14% 75.90% 06/30/2018 0.1088% 6,035,778$ 198,039$ 6,233,817$ 7,313,615$ 82.53% 79.50% 06/30/2019 0.1132% 6,258,574$ 194,492$ 6,453,066$ 8,008,282$ 78.15% 80.20% 06/30/2020 0.1148% 6,882,784$ 212,348$ 7,095,132$ 8,189,223$ 84.05% 79.10% 06/30/2021 0.1176% 5,022,047$ 153,374$ 5,175,421$ 8,466,921$ 59.31% 87.00% Contributions Contributions in Relation to as a Statutorily the Statutorily Contribution Percentage Required Required Deficiency Covered of Covered Contributions Contributions (Excess)Payroll Payroll 509,632$ 509,632$ –$ 6,795,097$ 7.50% 507,606$ 507,606$ –$ 6,768,463$ 7.50% 522,131$ 522,131$ –$ 6,961,749$ 7.50% 580,703$ 580,703$ –$ 7,742,669$ 7.50% 611,979$ 611,979$ –$ 8,159,717$ 7.50% 621,390$ 621,390$ –$ 8,285,192$ 7.50% 665,363$ 665,363$ –$ 8,871,502$ 7.50% Note: City Fiscal Year-End Date City Fiscal Year-End Date 12/31/2015 12/31/2016 Schedule of City Contributions PERA – General Employees Retirement Fund 12/31/2017 Year Ended December 31, 2021 12/31/2018 12/31/2019 12/31/2021 The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30,2015 measurement date).This schedule is intended to present 10-year trend information. Additional years will be added as they become available. 12/31/2016 CITY OF GOLDEN VALLEY PERA – General Employees Retirement Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability 12/31/2015 12/31/2017 12/31/2018 12/31/2019 12/31/2020 Year Ended December 31, 2021 12/31/2021 12/31/2020 -76- Proportionate Share of the City’s Net Pension Proportionate Liability and City’s Share of the the City’s Proportionate Plan Fiduciary State of Share of the Share of the Net Position City’s City’s Minnesota’s State of Net Pension as a PERA Fiscal Proportion Proportionate Proportionate Minnesota’s Liability as a Percentage Year-End Date of the Net Share of the Share of the Share of the City’s Percentage of of the Total (Measurement Pension Net Pension Net Pension Net Pension Covered Covered Pension Date)Liability Liability Liability Liability Payroll Payroll Liability 06/30/2015 0.3230% 3,670,036$ –$ 3,670,036$ 2,955,388$ 124.18% 86.60% 06/30/2016 0.3190% 12,802,028$ –$ 12,802,028$ 3,072,358$ 416.68% 63.90% 06/30/2017 0.3190% 4,306,880$ –$ 4,306,880$ 3,274,040$ 131.55% 85.40% 06/30/2018 0.3157% 3,365,037$ –$ 3,365,037$ 3,327,398$ 101.13% 88.80% 06/30/2019 0.3331% 3,546,186$ –$ 3,546,186$ 3,511,202$ 101.00% 89.30% 06/30/2020 0.3216% 4,239,033$ 99,871$ 4,338,904$ 3,627,488$ 116.86% 87.20% 06/30/2021 0.3083% 2,379,749$ 106,967$ 2,486,716$ 3,643,415$ 65.32% 93.70% Contributions Contributions in Relation to as a Statutorily the Statutorily Contribution Percentage Required Required Deficiency Covered of Covered Contributions Contributions (Excess)Payroll Payroll 507,642$ 507,642$ –$ 3,133,590$ 16.20% 506,383$ 506,383$ –$ 3,125,427$ 16.20% 519,363$ 519,363$ –$ 3,205,941$ 16.20% 550,962$ 550,962$ –$ 3,400,997$ 16.20% 609,750$ 609,750$ –$ 3,597,346$ 16.95% 644,673$ 644,673$ –$ 3,642,224$ 17.70% 607,647$ 607,647$ –$ 3,433,032$ 17.70% Note: Year-End Date 12/31/2015 CITY OF GOLDEN VALLEY PERA – Public Employees Police and Fire Fund Schedule of City’s and Nonemployer Proportionate Share of Net Pension Liability Year Ended December 31, 2021 PERA – Public Employees Police and Fire Fund 12/31/2021 Schedule of City Contributions Year Ended December 31, 2021 The City implemented GASB Statement No.68 in fiscal 2015 (using a June 30, 2015 measurement date). This schedule is intended to present 10-year trend information. Additional years will be added as they become available. City Fiscal Year-End Date 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2016 12/31/2021 City Fiscal -77- City fiscal year ended December 31,2015 2016 2017 2018 2019 2020 2021 year ended December 31, (measurement date)2014 2015 2016 2017 2018 2019 2020 Total pension liability Service cost 158,309$ 162,663$ 169,611$ 165,540$ 174,845$ 171,251$ 183,925$ Interest 189,130 198,248 221,030 244,540 228,505 202,299 198,850 Difference between expected and actual experience – – 175,353 – (124,858) – (183,732) Changes in assumptions – (44,179) – 24,168 60,574 – 38,609 Changes of benefit terms – – 69,254 – 78,567 120,568 120,267 Benefit payments (332,858) (110,208) (307,251) (328,180) (776,390) (361,231) (754,557) Net change in total pension liability 14,581 206,524 327,997 106,068 (358,757) 132,887 (396,638) Total pension liability – beginning 2,709,977 2,724,558 2,931,082 3,259,079 3,365,147 3,006,390 3,139,277 Total pension liability – ending 2,724,558$ 2,931,082$ 3,259,079$ 3,365,147$ 3,006,390$ 3,139,277$ 2,742,639$ Plan fiduciary net position Contributions (state and local)143,581$ 148,972$ 153,252$ 161,767$ 169,606$ 174,486$ 187,368$ Net investment income 335,884 (20,626) 414,106 849,121 (259,687) 1,092,687 893,892 Benefit payments (332,858) (110,208) (307,251) (328,180) (776,390) (361,231) (754,557) Administrative costs (16,509) (15,827) (16,889) (12,778) (18,459) (16,518) (15,442) Net change in plan fiduciary net position 130,098 2,311 243,218 669,930 (884,930) 889,424 311,261 Total plan fiduciary net position – beginning 4,500,389 4,630,487 4,632,798 4,876,016 5,545,946 4,661,016 5,550,440 Total plan fiduciary net position – ending 4,630,487$ 4,632,798$ 4,876,016$ 5,545,946$ 4,661,016$ 5,550,440$ 5,861,701$ Net pension liability (asset)(1,905,929)$ (1,701,716)$ (1,616,937)$ (2,180,799)$ (1,654,626)$ (2,411,163)$ (3,119,062)$ Plan fiduciary net position as a percentage of the total pension liability 169.95%158.06%149.61%164.81%155.04%176.81%213.72% Note: The City implemented GASB Statement No.68 in fiscal 2015 (using a December 31,2014 measurement date).This schedule is intended to present 10-year trend information. Additional years will be added as they become available. Department Relief Association CITY OF GOLDEN VALLEY Golden Valley Fire Department Relief Association Schedule of Changes in Net Pension Asset and Related Ratios Year Ended December 31, 2021 Golden Valley Fire -78- Nonemployer Statutorily Contribution Required Actual Contribution State 2% Contributions Contributions Excess Fire Aid 1,141$ 1,141$ –$ 142,440$ –$ –$ –$ 148,972$ –$ –$ –$ 153,252$ –$ –$ –$ 161,767$ –$ –$ –$ 169,606$ –$ –$ –$ 174,486$ –$ –$ –$ 187,368$ –$ –$ –$ 195,195$ Note: Year Ended December 31, 2021 CITY OF GOLDEN VALLEY Golden Valley Fire Department Relief Association Schedule of City Contributions and Nonemployer Contributing Entities City Contributions 2016 The City implemented GASB Statement No.68 in fiscal 2015 (using a December 31, 2014 measurement date). This schedule is intended to present 10-year trend information. Additional years will be added as they become available. City Fiscal Year Ended December 31, 2014 2015 2017 2018 2019 2020 2021 -79- 2018 2019 2020 2021 Total OPEB liability Service cost 133,055$ 144,892$ 110,996$ 131,927$ Interest 71,708 72,136 84,722 48,057 Differences between expected and actual experience – – (620,986) 4,583 Changes of assumptions 50,539 (101,648) 125,655 122,651 Benefit payments (72,237) (62,128) (81,242) (89,561) Net change in total OPEB liability 183,065 53,252 (380,855) 217,657 Total OPEB liability – beginning of year 1,800,103 1,983,168 2,036,420 1,655,565 Total OPEB liability – end of year 1,983,168$ 2,036,420$ 1,655,565$ 1,873,222$ Covered payroll 9,700,000$ 10,100,000$ 10,100,000$ 10,100,000$ Total OPEB liability as a percentage of covered payroll 20.45%20.16%16.39%18.55% Year Ended December 31, 2021 Note 2: Note 1: There are no plan assets accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No.75 to pay these benefits. The City implemented GASB Statement No.75 in fiscal 2018.This schedule is intended to present 10-year trend information. Additional years will be added as they become available. CITY OF GOLDEN VALLEY Other Post-Employment Benefits Plan Schedule of Changes in the City’s Total OPEB Liability and Related Ratios -80- CITY OF GOLDEN VALLEY Notes to Required Supplementary Information December 31, 2021 -81- PERA – GENERAL EMPLOYEES RETIREMENT FUND 2021 CHANGES IN ACTUARIAL ASSUMPTIONS •The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. •The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2020 CHANGES IN ACTUARIAL ASSUMPTIONS •The price inflation assumption was decreased from 2.50 percent to 2.25 percent. •The payroll growth assumption was decreased from 3.25 percent to 3.00 percent. •Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25 percent less than previous rates. •Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. •Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years two through five, and slightly higher thereafter. •Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. •The base mortality table for healthy annuitants and employees was changed from the RP-2014 Table to the Pub-2010 General Mortality Table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 Disabled Annuitant Mortality Table to the Pub-2010 General/Teacher Disabled Annuitant Mortality Table, with adjustments. •The mortality improvement scale was changed from MP-2018 to MP-2019. •The assumed spouse age difference was changed from two years older for females to one year older. •The assumed number of married male new retirees electing the 100.00 percent joint and survivor option changed from 35.00 percent to 45.00 percent. The assumed number of married female new retirees electing the 100.00 percent joint and survivor option changed from 15.00 percent to 30.00 percent. The corresponding number of married new retirees electing the life annuity option was adjusted accordingly. 2020 CHANGES IN PLAN PROVISIONS •Augmentation for current privatized members was reduced to 2.00 percent for the period July 1, 2020 through December 31, 2023, and zero percent thereafter. Augmentation was eliminated for privatizations occurring after June 30, 2020. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -82- PERA – GENERAL EMPLOYEES RETIREMENT FUND (CONTINUED) 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2017 to MP-2018. 2019 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. 2018 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. 2018 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 4.00 percent to 3.00 percent, beginning July 1, 2018. • Deferred augmentation was changed to zero 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 1.00 percent per year with a provision to increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than 1.50 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. • Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -83- PERA – GENERAL EMPLOYEES RETIREMENT FUND (CONTINUED) 2017 CHANGES IN ACTUARIAL ASSUMPTIONS •The Combined Service Annuity (CSA) loads were changed from 0.80 percent for active members and 60.00 percent for vested and nonvested deferred members. The revised CSA loads are now zero percent for active member liability, 15.00 percent for vested deferred member liability, and 3.00 percent for nonvested deferred member liability. •The assumed post-retirement benefit increase rate was changed from 1.00 percent per year for all years, to 1.00 percent per year through 2044, and 2.50 percent per year thereafter. 2017 CHANGES IN PLAN PROVISIONS •The state’s contribution for the Minneapolis Employees Retirement Fund equals $16.0 million in 2017 and 2018, and $6.0 million thereafter. •The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21.0 million to $31.0 million in calendar years 2019 to 2031. The state’s contribution changed from $16.0 million to $6.0 million in calendar years 2019 to 2031. 2016 CHANGES IN ACTUARIAL ASSUMPTIONS •The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2035, and 2.50 percent per year thereafter, to 1.00 percent per year for all years. •The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate changed from 7.90 percent to 7.50 percent. •Other assumptions were changed pursuant to the experience study 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 CHANGES IN ACTUARIAL ASSUMPTIONS •The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030, and 2.50 percent per year thereafter, to 1.00 percent per year through 2035, and 2.50 percent per year thereafter. 2015 CHANGES IN PLAN PROVISIONS •On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892.0 million. Upon consolidation, state and employer contributions were revised; the state’s contribution of $6.0 million, which meets the special funding situation definition, was due September 2015. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -84- PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND 2021 CHANGES IN ACTUARIAL ASSUMPTIONS • The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. • The inflation assumption was changed from 2.50 percent to 2.25 percent. • The payroll growth assumption was changed from 3.25 percent to 3.00 percent. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 Table to the Pub-2010 Public Safety Mortality Table. The mortality improvement scale was changed from MP-2019 to MP-2020. • The base mortality table for disabled annuitants was changed from the RP-2014 Healthy Annuitant Mortality Table (with future mortality improvement according to Scale MP-2019) to the Pub-2010 Public Safety Disabled Annuitant Mortality Table (with future mortality improvement according to Scale MP-2020). • Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall impact is a decrease in gross salary increase rates. • Assumed rates of retirement were changed as recommended in the July 14, 2020 exper ience study. The changes result in slightly more unreduced retirements and fewer assumed early retirements. • Assumed rates of withdrawal were changed from select and ultimate rates to service -based rates. The changes result in more assumed terminations. • Assumed rates of disability were increased for ages 25–44 and decreased for ages over 49. Overall, proposed rates result in more projected disabilities. • Assumed percent married for active female members was changed from 60 percent to 70 percent. Minor changes to form of payment assumptions were applied. 2020 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2018 to MP-2019. 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The mortality projection scale was changed from MP-2017 to MP-2018. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -85- PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND (CONTINUED) 2018 CHANGES IN ACTUARIAL ASSUMPTIONS •The mortality projection scale was changed from MP-2016 to MP-2017. 2018 CHANGES IN PLAN PROVISIONS •Post-retirement benefit increases were changed to 1.00 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 202 0, and $9.0 million thereafter, until the plan reaches 100.00 percent funding, or July 1, 2048, if earlier. •Member contributions were changed from 10.80 percent to 11.30 percent of pay, effective January 1, 2019, and 11.80 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 4.00 percent to 3.00 percen t, beginning July 1, 2018. •Deferred augmentation was changed to zero 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 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 CSA load was 30.00 percent for vested and nonvested deferred members. The CSA has been changed to 33.00 percent for vested members, and 2.00 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 3.00 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. •Assumed percentage of married female members was decreased from 65.00 percent to 60.00 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 was changed from 5.60 percent per annum to 7.50 percent per annum. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -86- PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND (CONTINUED) 2016 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2037, and 2.50 percent per year thereafter, to 1.00 percent per year for all future years. • The assumed investment return was changed from 7.90 percent to 7.50 percent. • The single discount rate changed from 7.90 percent to 5.60 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 CHANGES IN ACTUARIAL ASSUMPTIONS • The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2030, and 2.50 percent per year thereafter, to 1.00 percent per year through 2037, and 2.50 percent per year thereafter. 2015 CHANGES IN PLAN PROVISIONS • The post-retirement benefit increase to be paid after attainment of the 90.00 percent funding threshold was changed from inflation up to 2.50 percent, to a fixed rate of 2.50 percent. GOLDEN VALLEY FIRE DEPARTMENT RELIEF ASSOCIATION 2021 CHANGES IN ACTUARIAL ASSUMPTIONS • The expected investment return and discount rate decreased from 6.75 percent to 6.50 percent to reflect updated market assumptions. • The mortality assumptions were updated from the rates used in the July 1, 2018 Minnesota PERA PEPFF actuarial valuation to the ratios used in the July 1, 2020 Minnesota PERA PEPFF actuarial valuation. • The inflation assumption decreased from 2.50 percent to 2.25 percent. 2021 CHANGES IN PLAN PROVISIONS • The plan benefit level increased from $8,700 to $9,200 per year of service. 2020 CHANGES IN PLAN PROVISIONS • The plan benefit level increased from $8,300 to $8,700 per year of service. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -87- GOLDEN VALLEY FIRE DEPARTMENT RELIEF ASSOCIATION (CONTINUED) 2019 CHANGES IN ACTUARIAL ASSUMPTIONS •The actuarial assumptions for the single discount rate decreased from 7.25 percent to 6.75 percent. •The inflation assumption was updated from 2.75 percent to 2.50 percent. •The mortality and withdrawal assumptions were updated to the rates used in the July 1, 2018 Minnesota PERA Minnesota Police and Fire Plan actuarial valuation. 2019 CHANGES IN PLAN PROVISIONS •The plan benefit level increased from $8,000 to $8,300 per year of service. 2018 CHANGES IN ACTUARIAL ASSUMPTIONS •The actuarial assumptions for the single discount rate decreased from 7.50 percent to 7.25 percent. 2017 CHANGES IN PLAN PROVISIONS •The plan benefit level increased from $7,500 to $8,000 per year of service. 2016 CHANGES IN ACTUARIAL ASSUMPTIONS •The actuarial assumptions for the single discount rate increased from 7.00 percent to 7.50 percent. CITY OF GOLDEN VALLEY Notes to Required Supplementary Information (continued) December 31, 2021 -88- OTHER POST-EMPLOYMENT BENEFIT PLAN 2021 CHANGES IN ACTUARIAL ASSUMPTIONS • The actuarial assumptions for the single discount rate decreased from 2.74 percent to 2.12 percent. 2020 CHANGES IN ACTUARIAL ASSUMPTIONS • The actuarial assumptions for the single discount rate decreased from 4.09 percent to 2.74 percent. • The healthcare cost trend rate, mortality tables, and payroll growth rates were updated for changes in recent experience studies and inflationary adjustments since the previous valuation. 2019 CHANGES IN ACTUARIAL ASSUMPTIONS • The actuarial assumptions for the single discount rate increased from 3.44 percent to 4.09 percent. 2018 CHANGES IN ACTUARIAL ASSUMPTIONS • The actuarial assumptions for the single discount rate decreased from 4.50 percent to 3.44 percent. SUPPLEMENTARY INFORMATION THIS PAGE INTENTIONALLY LEFT BLANK -89- NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Human Service – used to account for fundraising and pull-tab gambling proceeds remitted to the City by various nonprofit organizations that run charitable gambling operations within the City’s limits. The monies are committed to support organizations or programs that address human service needs in the City. Cemetery – used to account for monies received from cemetery plot sales. These funds are restricted for maintenance of the City-owned cemetery. DWI Enforcement – used to account for monies received from DWI-related fines and forfeitures. These funds are restricted for DWI enforcement and education. VOTF – used to account for grants and other funding restricted for the Violent Offenders Task Force. HRA General – used to account for the general activities of the City’s HRA, a blended component unit. Brookview – used to account for the revenues and expenditures of the Brookview Community Center facility. Lodging Tax – used to account for lodging taxes submitted by hotels and motels in the City and the disbursement of those taxes. Noah Joynes Youth Recreation – used to account for contributions to the City’s parks and recreation department to provide assistance in supporting youth programs. American Recovery Plan Act – used to account for federal funds allocated to the City under the American Recovery Plan Act. DEBT SERVICE FUNDS Certificates of Indebtedness – used to account for accumulation of, resources for, and payment of debt service on the City’s general obligation certificates of indebtedness. Brookview Lease Revenue Bonds – used to account for accumulation of, resources for, and payment of debt service on bonds sold to finance the construction of the Brookview Community Center. Douglas Drive Reconstruction Bonds – used to account for accumulation of, resources for, and payment of debt service on bonds sold to finance the reconstruction of Douglas Drive. Highway 55 West Bonds – used to account for accumulation of, resources for, and payment of debt service on bonds sold to finance improvements on Highway 55 West. -90- CAPITAL PROJECT FUNDS Building Fund – used to provide financing for major capital improvements made to the City’s buildings. Cable Improvement Fund – used to provide for the ongoing capital equipment needs necessary to support cable television public access and local programming. Park Capital Improvement Fund – used to provide financing for major improvements to the City’s parks and open space areas. Equipment Replacement Fund – used to provide financing for major vehicle and equipment purchases for the City’s General Fund divisions. HRA Capital Project Funds – used to account for the activity of the City’s HRA housing program and the redevelopment activity in the City’s tax increment districts: North Wirth No. 1505, Highway 55 West No. 1506, and Cornerstone Creek No. 1507. Capital Improvement Fund – This fund is used to provide financing for major street and streetlight projects in the City, including a portion of the Street Reconstruction Program. Douglas Drive Improvement Fund – used to account for street improvements related to Douglas Drive. THIS PAGE INTENTIONALLY LEFT BLANK Special Revenue Debt Service Capital Project Totals Assets Cash and temporary investments 2,044,325$ 1,970,185$ 13,469,296$ 17,483,806$ Receivables Special assessments –179,862 27,855 207,717 Accounts 114,991 – – 114,991 Due from other funds – – 183,120 183,120 Advances to other funds – – 540,000 540,000 Due from other governmental units – – 45,941 45,941 Total assets 2,159,316$ 2,150,047$ 14,266,212$ 18,575,575$ Liabilities Accounts payable 8,451$ –$ 46,419$ 54,870$ Contracts payable – – 16,203 16,203 Due to other governmental units 50,120 – 467 50,587 Deposits 152,668 –540,799 693,467 Unearned revenue 967,921 ––967,921 Total liabilities 1,179,160 –603,888 1,783,048 Deferred inflows of resources Unavailable revenue – special assessments –179,862 27,855 207,717 Fund balances Restricted 818,366 1,970,185 2,084,145 4,872,696 Committed 161,790 – – 161,790 Assigned – – 11,550,324 11,550,324 Total fund balances 980,156 1,970,185 13,634,469 16,584,810 Total liabilities, deferred inflows of resources, and fund balances 2,159,316$ 2,150,047$ 14,266,212$ 18,575,575$ CITY OF GOLDEN VALLEY Nonmajor Governmental Funds Combining Balance Sheet December 31, 2021 -91- Special Revenue Debt Service Capital Project Totals Revenue Ad valorem taxes –$ 1,218,300$ 73,169$ 1,291,469$ Tax increments – – 684,261 684,261 Special assessments – 40,489 – 40,489 Intergovernmental revenue 242,955 – 44,785 287,740 Charges for services 137,862 – 3,144 141,006 Investment income (charges)(3,308) (6,293) (41,986) (51,587) Other revenue Lawful gambling proceeds 57,048 – – 57,048 Miscellaneous 37,588 – 51,852 89,440 Total revenue 472,145 1,252,496 815,225 2,539,866 Expenditures Current General government 70,457 – – 70,457 Public safety 8,919 – – 8,919 Parks and recreation 241,535 – – 241,535 Capital outlay 24,515 – 3,447,122 3,471,637 Debt service Principal – 1,405,000 – 1,405,000 Interest and fiscal charges – 700,811 – 700,811 Total expenditures 345,426 2,105,811 3,447,122 5,898,359 Excess (deficiency) of revenue over expenditures 126,719 (853,315) (2,631,897) (3,358,493) Other financing sources (uses) Sale of capital assets – – 263,333 263,333 Transfers in – 256,810 3,140,550 3,397,360 Transfers (out)(15,000) – (256,810) (271,810) Total other financing sources (uses)(15,000) 256,810 3,147,073 3,388,883 Net change in fund balances 111,719 (596,505) 515,176 30,390 Fund balances Beginning of year 868,437 2,566,690 13,119,293 16,554,420 End of year 980,156$ 1,970,185$ 13,634,469$ 16,584,810$ CITY OF GOLDEN VALLEY Nonmajor Governmental Funds Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Year Ended December 31, 2021 -92- Human DWI Service Cemetery Enforcement VOTF Assets Cash and temporary investments 156,928$ 95,627$ 4,011$ 141,392$ Receivables Accounts 4,862 – – – Total assets 161,790$ 95,627$ 4,011$ 141,392$ Liabilities Accounts payable –$ –$ 250$ –$ Due to other governmental units – – – – Deposits – – – – Unearned revenue – – – – Total liabilities – – 250 – Fund balances Restricted for cemetery maintenance – 95,627 – – Restricted for DWI enforcement – – 3,761 – Restricted for VOTF – – – 141,392 Restricted for redevelopment – – – – Restricted for Brookview – – – – Restricted for lodging tax – – – – Restricted for youth recreation – – – – Restricted for ARPA purposes – – – – Committed for human service needs 161,790 – – – Total fund balances 161,790 95,627 3,761 141,392 Total liabilities and fund balances 161,790$ 95,627$ 4,011$ 141,392$ CITY OF GOLDEN VALLEY Nonmajor Special Revenue Funds Combining Balance Sheet December 31, 2021 -93- Noah Joynes American HRA Lodging Youth Recovery General Brookview Tax Recreation Plan Act Totals 158,538$ 423,387$ 38,047$ 20,509$ 1,005,886$ 2,044,325$ – 101,833 8,296 – – 114,991 158,538$ 525,220$ 46,343$ 20,509$ 1,005,886$ 2,159,316$ –$ 320$ 7,881$ –$ –$ 8,451$ – 3,724 8,476 – 37,920 50,120 436 152,232 – – – 152,668 – – – – 967,921 967,921 436 156,276 16,357 – 1,005,841 1,179,160 – – – – – 95,627 – – – – – 3,761 – – – – – 141,392 158,102 – – – – 158,102 – 368,944 – – – 368,944 – – 29,986 – – 29,986 – – – 20,509 – 20,509 – – – – 45 45 – – – – – 161,790 158,102 368,944 29,986 20,509 45 980,156 158,538$ 525,220$ 46,343$ 20,509$ 1,005,886$ 2,159,316$ -94- Human DWI Service Cemetery Enforcement VOTF Revenue Intergovernmental revenue –$ –$ –$ 15,000$ Charges for services – – – – Investment income (charges)– (457) (54) (638) Other revenue Lawful gambling proceeds 57,048 – – – Miscellaneous 27,930 1,000 8,158 – Total revenue 84,978 543 8,104 14,362 Expenditures Current General government Operating supplies 10,457 – – – Professional services 40,000 – – – Public safety Operating supplies – – 8,919 – Parks and recreation Salaries – – – – Operating supplies – – – – Professional services – – – – Capital outlay – – – – Total expenditures 50,457 – 8,919 – Excess (deficiency) of revenue over expenditures 34,521 543 (815) 14,362 Other financing sources (uses) Transfers (out)– – (15,000) – Net change in fund balances 34,521 543 (15,815) 14,362 Fund balances Beginning of year 127,269 95,084 19,576 127,030 End of year 161,790$ 95,627$ 3,761$ 141,392$ CITY OF GOLDEN VALLEY Nonmajor Special Revenue Funds Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Year Ended December 31, 2021 -95- Noah Joynes American HRA Lodging Youth Recovery General Brookview Tax Recreation Plan Act Totals –$ 207,955$ –$ –$ 20,000$ 242,955$ – 137,862 – – – 137,862 (757) (1,268)(183)4 45 (3,308) – – – – – 57,048 – – – 500 – 37,588 (757) 344,549 (183) 504 20,045 472,145 – – – – 20,000 30,457 – – – – – 40,000 – – – – – 8,919 – 211,252 – – – 211,252 – 30,023 – – – 30,023 – –– 260 – 260 – 24,515 – – – 24,515 – 265,790 – 260 20,000 345,426 (757) 78,759 (183) 244 45 126,719 – – – – – (15,000) (757) 78,759 (183) 244 45 111,719 158,859 290,185 30,169 20,265 – 868,437 158,102$ 368,944$ 29,986$ 20,509$ 45$ 980,156$ -96- Brookview Douglas Drive Certificates of Lease Revenue Reconstruction Hwy 55 West Indebtedness Bonds Bonds Bonds Totals Assets Cash and temporary investments –$ 1,453,574$ 297,527$ 219,084$ 1,970,185$ Receivables Special assessments – – – 179,862 179,862 Total assets –$ 1,453,574$ 297,527$ 398,946$ 2,150,047$ Deferred inflows of resources Unavailable revenue – special assessments –$ –$ –$ 179,862$ 179,862$ Fund balances Restricted for debt service – 1,453,574 297,527 219,084 1,970,185 Total deferred inflows of resources and fund balances –$ 1,453,574$ 297,527$ 398,946$ 2,150,047$ CITY OF GOLDEN VALLEY Nonmajor Debt Service Funds Combining Balance Sheet December 31, 2021 -97- Brookview Douglas Drive Certificates of Lease Revenue Reconstruction Hwy 55 West Indebtedness Bonds Bonds Bonds Totals Revenue Ad valorem taxes –$ 1,218,300$ –$ –$ 1,218,300$ Special assessments – –– 40,489 40,489 Investment income (charges)– (3,688) (1,738) (867) (6,293) Total revenue – 1,214,612 (1,738) 39,622 1,252,496 Expenditures Debt service Principal 280,000 690,000 235,000 200,000 1,405,000 Interest and fiscal charges 4,200 520,573 138,063 37,975 700,811 Total expenditures 284,200 1,210,573 373,063 237,975 2,105,811 Excess (deficiency) of revenue over expenditures (284,200) 4,039 (374,801) (198,353) (853,315) Other financing sources Transfers in 111,797 – – 145,013 256,810 Net change in fund balances (172,403) 4,039 (374,801) (53,340) (596,505) Fund balances Beginning of year 172,403 1,449,535 672,328 272,424 2,566,690 End of year –$ 1,453,574$ 297,527$ 219,084$ 1,970,185$ CITY OF GOLDEN VALLEY Nonmajor Debt Service Funds Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Year Ended December 31, 2021 -98- Cable Park Capital Equipment HRA Capital Building Improvement Improvement Replacement Project Assets Cash and temporary investments 3,202,130$ 401,264$ 611,250$ 3,502,158$ 31,455$ Receivables Special assessments – – – – – Due from other funds – – – – – Advances to other funds – – – – – Due from other governmental units – – – – – Total assets 3,202,130$ 401,264$ 611,250$ 3,502,158$ 31,455$ Liabilities Accounts payable 14,459$ –$ –$ 10,696$ –$ Contracts payable – – – – – Due to other governmental units 467 – – – – Deposits – – – – – Total liabilities 14,926 – – 10,696 – Deferred inflows of resources Unavailable revenue – special assessments – – – – – Fund balances Restricted for redevelopment – – – – 31,455 Restricted for street improvements – – – – – Assigned for cable improvements – 401,264 – – – Assigned for park improvements – – 611,250 – – Assigned for equipment replacement – – – 3,491,462 – Assigned for street improvements – – – – – Assigned for capital improvements 3,187,204 – – – – Total fund balances 3,187,204 401,264 611,250 3,491,462 31,455 Total liabilities, deferred inflows of resources, and fund balances 3,202,130$ 401,264$ 611,250$ 3,502,158$ 31,455$ CITY OF GOLDEN VALLEY Nonmajor Capital Project Funds Combining Balance Sheet December 31, 2021 -99- Cornerstone North Wirth Hwy 55 West Creek Capital Douglas Drive Tax Increment Tax Increment Tax Increment Improvement Improvement Totals 21,501$ 536,368$ 44,081$ 3,534,353$ 1,584,736$ 13,469,296$ 27,855 – – – – 27,855 – – – 183,120 – 183,120 – – – 540,000 – 540,000 1,156 – – 44,785 – 45,941 50,512$ 536,368$ 44,081$ 4,302,258$ 1,584,736$ 14,266,212$ –$ –$ –$ 21,264$ –$ 46,419$ – – – 16,203 – 16,203 – – – – – 467 8,686 – – 532,113 – 540,799 8,686 – – 569,580 – 603,888 27,855 – – – – 27,855 13,971 536,368 44,081 – – 625,875 – – – – 1,458,270 1,458,270 – – – – – 401,264 – – – – – 611,250 – – – – – 3,491,462 – – – – 126,466 126,466 – – – 3,732,678 – 6,919,882 13,971 536,368 44,081 3,732,678 1,584,736 13,634,469 50,512$ 536,368$ 44,081$ 4,302,258$ 1,584,736$ 14,266,212$ -100- Cable Park Capital Equipment HRA Capital Building Improvement Improvement Replacement Project Revenue Ad valorem taxes –$ –$ –$ –$ 72,000$ Tax increments – – – – – Intergovernmental revenue – – – – – Charges for services – – – – – Investment income (charges)(12,683) (1,832) (2,786) (15,959) (359) Other revenue Miscellaneous – 36,753 2,676 12,423 – Total revenue (12,683) 34,921 (110) (3,536) 71,641 Expenditures Capital outlay Street – – – – – City buildings and grounds 162,039 2,580 245,242 – – Equipment – – – 1,005,014 – HRA projects – – – – 140,978 Total expenditures 162,039 2,580 245,242 1,005,014 140,978 Excess (deficiency) of revenue over expenditures (174,722) 32,341 (245,352) (1,008,550) (69,337) Other financing sources (uses) Sale of capital assets – – – 263,333 – Transfers in 1,635,000 – 400,000 1,105,550 – Transfers (out)– – – (111,797) – Total other financing sources (uses)1,635,000 – 400,000 1,257,086 – Net change in fund balances 1,460,278 32,341 154,648 248,536 (69,337) Fund balances Beginning of year 1,726,926 368,923 456,602 3,242,926 100,792 End of year 3,187,204$ 401,264$ 611,250$ 3,491,462$ 31,455$ CITY OF GOLDEN VALLEY Nonmajor Capital Project Funds Combining Statement of Revenue, Expenditures, and Changes in Fund Balances Year Ended December 31, 2021 -101- Cornerstone North Wirth Hwy 55 West Creek Capital Douglas Drive Tax Increment Tax Increment Tax Increment Improvement Improvement Totals –$ –$ –$ 1,169$ –$ 73,169$ 29,118 592,506 62,637 – – 684,261 – – – 44,785 – 44,785 – – – 3,144 – 3,144 (47) (1,037) (57) 5,395 (12,621) (41,986) – – – – – 51,852 29,071 591,469 62,580 54,493 (12,621) 815,225 – – – – 1,014,566 1,014,566 – – – 454,830 – 864,691 – – – – – 1,005,014 31,264 338,011 52,598 – – 562,851 31,264 338,011 52,598 454,830 1,014,566 3,447,122 (2,193) 253,458 9,982 (400,337) (1,027,187) (2,631,897) – – – – – 263,333 – – – – – 3,140,550 – (145,013) – – – (256,810) – (145,013) – – – 3,147,073 (2,193) 108,445 9,982 (400,337) (1,027,187) 515,176 16,164 427,923 34,099 4,133,015 2,611,923 13,119,293 13,971$ 536,368$ 44,081$ 3,732,678$ 1,584,736$ 13,634,469$ -102- THIS PAGE INTENTIONALLY LEFT BLANK 2020 Final Over (Under) Budget Actual Budget Actual Revenue Taxes Ad valorem 20,151,285$ 20,274,481$ 123,196$ 19,399,927$ Penalties and interest – 18,665 18,665 11,072 Total taxes 20,151,285 20,293,146 141,861 19,410,999 Special assessments 6,000 7,344 1,344 13,592 Licenses and permits Licenses 258,895 248,595 (10,300) 247,988 Permits 984,000 1,347,121 363,121 1,102,429 Total licenses and permits 1,242,895 1,595,716 352,821 1,350,417 Intergovernmental revenue Federal grants – 2,500 2,500 1,663,334 State grants 38,685 54,464 15,779 59,334 Total intergovernmental revenue 38,685 56,964 18,279 1,722,668 Charges for services General government 21,260 17,833 (3,427) 37,263 Police 120,350 54,458 (65,892) 86,538 Fire 44,000 1,150 (42,850) 850 Physical development 7,500 21,466 13,966 (3,134) Public works 171,800 177,244 5,444 172,383 Parks and recreation 418,800 215,043 (203,757) 135,133 Other funds 766,500 805,260 38,760 644,633 Total charges for services 1,550,210 1,292,454 (257,756) 1,073,666 Fines and forfeitures 165,000 127,096 (37,904) 148,672 Investment income (charges)150,000 (63,306) (213,306) 232,216 Other revenue Rents 188,320 189,177 857 188,792 Miscellaneous 10,300 13,096 2,796 5,015 Total other revenue 198,620 202,273 3,653 193,807 Total revenue 23,502,695$ 23,511,687$ 8,992$ 24,146,037$ 2021 CITY OF GOLDEN VALLEY General Fund Schedule of Revenue – Budget and Actual Year Ended December 31, 2021 (With Comparative Actual Amounts for the Year Ended December 31, 2020) -103- Final Personal Supplies and Budget Services Services Capital Outlay Expenditures General government City Council 410,650$ 210,709$ 162,571$ –$ City manager 1,105,490 982,151 119,876 – Legal service 208,135 216,065 19,169 – Total general government 1,724,275 1,408,925 301,616 – Administrative services 2,289,175 1,147,821 1,160,867 – Casualty insurance 350,000 – 269,420 – Public safety Police 6,826,630 5,161,640 966,810 34,011 Fire 1,693,855 1,138,067 312,444 – Total public safety 8,520,485 6,299,707 1,279,254 34,011 Physical development Administration 330,495 317,024 6,979 – Engineering 622,770 495,788 65,694 – Inspections 827,555 670,405 126,603 – Planning 385,205 388,337 24,485 – Total physical development 2,166,025 1,871,554 223,761 – Public works Building operations 754,260 48,530 726,412 16,625 Street maintenance 2,346,525 991,236 1,313,376 – Park maintenance 1,380,865 975,207 428,428 – Total public works 4,481,650 2,014,973 2,468,216 16,625 Parks and recreation Administration 872,740 763,157 101,132 – Recreation programs 410,765 66,475 68,734 – Total parks and recreation 1,283,505 829,632 169,866 – Total expenditures 20,815,115$ 13,572,612$ 5,873,000$ 50,636$ 2021 Actual CITY OF GOLDEN VALLEY General Fund Schedule of Expenditures – Budget and Actual Year Ended December 31, 2021 (With Comparative Actual Amounts for the Year Ended December 31, 2020) -104- 2020 Over (Under) Total Budget Actual 373,280$ (37,370)$ 371,143$ 1,102,027 (3,463) 1,040,727 235,234 27,099 220,486 1,710,541 (13,734) 1,632,356 2,308,688 19,513 2,213,472 269,420 (80,580) 318,902 6,162,461 (664,169) 6,414,931 1,450,511 (243,344) 1,382,273 7,612,972 (907,513) 7,797,204 324,003 (6,492) 328,200 561,482 (61,288) 731,371 797,008 (30,547) 748,568 412,822 27,617 414,322 2,095,315 (70,710) 2,222,461 791,567 37,307 853,130 2,304,612 (41,913) 1,779,306 1,403,635 22,770 1,310,302 4,499,814 18,164 3,942,738 864,289 (8,451) 801,991 135,209 (275,556) 154,373 999,498 (284,007) 956,364 19,496,248$ (1,318,867)$ 19,083,497$ 2021 Actual -105- THIS PAGE INTENTIONALLY LEFT BLANK -106- INTERNAL SERVICE FUNDS Workers’ Compensation Fund – used to account for the financing of all of the City’s workers’ compensation benefits. Payroll Benefits Fund – used to account for the financing of all of the City’s employee benefits, such as compensated absences, pension contributions, other post-employment benefits, and termination pay. Vehicle Maintenance Fund – used to account for the maintenance of motor vehicles of all departments and related costs. Workers’Payroll Vehicle Compensation Benefits Maintenance Totals Assets Current assets Cash and temporary investments 251,156$ 2,559,752$ 263,116$ 3,074,024$ Receivables Accounts – 11,992 – 11,992 Due from other governmental units – 18,064 – 18,064 Inventory – –124,033 124,033 Total current assets 251,156 2,589,808 387,149 3,228,113 Noncurrent assets Net pension asset – fire relief – 3,119,062 – 3,119,062 Capital assets Machinery and equipment – – 263,971 263,971 Less accumulated depreciation – – (231,516) (231,516) Capital assets, net – – 32,455 32,455 Total noncurrent assets – 3,119,062 32,455 3,151,517 Total assets 251,156 5,708,870 419,604 6,379,630 Deferred outflows of resources Pension plan deferments – PERA – 8,004,756 – 8,004,756 Pension plan deferments – fire relief – 372,034 – 372,034 OPEB plan deferments – 392,244 – 392,244 Total deferred outflows of resources – 8,769,034 – 8,769,034 Total assets and deferred outflows of resources 251,156$ 14,477,904$ 419,604$ 15,148,664$ Liabilities Current liabilities Accounts payable –$ 4,864$ 2,357$ 7,221$ Accrued compensated absences – current – 1,338,288 – 1,338,288 Deposits – 33,995 – 33,995 Total current liabilities – 1,377,147 2,357 1,379,504 Noncurrent liabilities Accrued compensated absences – 297,891 – 297,891 Net pension liability – PERA – 7,401,796 – 7,401,796 Total OPEB liability – 1,873,222 – 1,873,222 Total noncurrent liabilities – 9,572,909 – 9,572,909 Total liabilities – 10,950,056 2,357 10,952,413 Deferred inflows of resources Pension plan deferments – PERA – 10,736,197 – 10,736,197 Pension plan deferments – fire relief – 1,229,619 – 1,229,619 OPEB plan deferments – 558,897 – 558,897 Total deferred inflows of resources – 12,524,713 – 12,524,713 Net position Net investment in capital assets – – 32,455 32,455 Restricted for fire relief pensions – 2,261,477 – 2,261,477 Unrestricted 251,156 (11,258,342) 384,792 (10,622,394) Total net position 251,156 (8,996,865) 417,247 (8,328,462) Total liabilities, deferred inflows of resources, and net position 251,156$ 14,477,904$ 419,604$ 15,148,664$ CITY OF GOLDEN VALLEY Internal Service Funds Combining Statement of Net Position December 31, 2021 -107- Workers’Payroll Vehicle Compensation Benefits Maintenance Totals Operating revenue Charges to other funds 394,953$ 7,850,718$ 663,978$ 8,909,649$ Payroll benefits charged to employees – 1,990,995 – 1,990,995 Total operating revenue 394,953 9,841,713 663,978 10,900,644 Operating expenses Workers’ compensation charges 394,953 – – 394,953 Payroll benefits charges – 8,261,848 – 8,261,848 Vehicle maintenance operations – –445,317 445,317 Depreciation – –27,318 27,318 Total operating expenses 394,953 8,261,848 472,635 9,129,436 Operating income – 1,579,865 191,343 1,771,208 Nonoperating revenue Intergovernmental revenue – 522,262 – 522,262 Investment income (charges)(465) (12,126) (848) (13,439) Gain on sale of capital assets – –5,500 5,500 Total nonoperating revenue (465) 510,136 4,652 514,323 Change in net position (465) 2,090,001 195,995 2,285,531 Net position Beginning of year 251,621 (11,086,866) 221,252 (10,613,993) End of year 251,156$ (8,996,865)$ 417,247$ (8,328,462)$ CITY OF GOLDEN VALLEY Internal Service Funds Combining Statement of Revenue, Expenses, and Changes in Net Position Year Ended December 31, 2021 -108- Workers’Payroll Vehicle Compensation Benefits Maintenance Totals Cash flows from operating activities Receipts from customers and users –$ 1,985,226$ –$ 1,985,226$ Receipts from interfund services provided 394,953 7,832,654 663,978 8,891,585 Paid to suppliers/service providers (286,538) (7,056,468) (96,539) (7,439,545) Paid to employees – (3,083,824) (370,397) (3,454,221) Net cash flows from operating activities 108,415 (322,412) 197,042 (16,955) Cash flows from capital and related financing activities Proceeds from sale of capital assets – – 5,500 5,500 Cash flows from investing activities Interest received (charged) on investments (465) (12,126) (848) (13,439) Cash flows from noncapital financing activities Intergovernmental revenue – 522,262 – 522,262 Net increase in cash and temporary investments/cash equivalents 107,950 187,724 201,694 497,368 Cash and temporary investments/cash equivalents Beginning of year 143,206 2,372,028 61,422 2,576,656 End of year 251,156$ 2,559,752$ 263,116$ 3,074,024$ Reconciliation of operating income to net cash flows from operating activities Operating income –$ 1,579,865$ 191,343$ 1,771,208$ Adjustments to reconcile operating income to net cash flows from operating activities Depreciation – – 27,318 27,318 Changes in assets, liabilities, and deferred outflows/inflows Accounts receivable – (5,769) – (5,769) Due from other governmental units – (18,064) – (18,064) Inventory – – (17,537) (17,537) Prepaids 108,415 – – 108,415 Net pension asset – fire relief – (707,899) – (707,899) Deferred outflows – pension and OPEB plans – (5,324,026) – (5,324,026) Accounts payable – 1,798 (3,967) (2,169) Due to other governmental units – (2,939) (115) (3,054) Deposits – 23,476 – 23,476 Accrued compensated absences – (226,878) – (226,878) Net pension liability – PERA – (3,720,021) – (3,720,021) Total OPEB liability – 217,657 – 217,657 Deferred inflows – pension and OPEB plans – 7,860,388 – 7,860,388 Net cash flows from operating activities 108,415$ (322,412)$ 197,042$ (16,955)$ CITY OF GOLDEN VALLEY Internal Service Funds Combining Statement of Cash Flows Year Ended December 31, 2021 -109- OTHER CITY INFORMATION Accounted for Current Amount Budget in Prior Years Year Remaining Sources of funds Tax increments received 920,000$ 368,775$ 29,118$ 522,107$ Real estate sales 575,000 523,431 – 51,569 Interest income (charges)– 4,435 (47) (4,388) Total sources of funds 1,495,000 896,641 29,071 569,288 Uses of funds Land and building acquisition – 236,432 31,264 (267,696) Site preparation and improvements 1,000,000 623,515 – 376,485 Administrative costs – 16,058 – (16,058) Interest and fiscal costs 495,000 4,472 – 490,528 Total uses of funds 1,495,000 880,477 31,264 583,259 Funds remaining (deficit)–$ 16,164$ (2,193)$ (13,971)$ Note: Purchaser/Developer Sale Price Cost GVEC, LLC Business Center 523,431$ 1,093,241$ Property purchased and sold to developers: Project The cost of the property sold to GVEC,LLC includes the $567,685 original purchase price that was paid by the North Wirth Parkway No. 1501 Tax Increment Financing District prior to the establishment of this district. CITY OF GOLDEN VALLEY Schedule of Sources and Uses of Public Funds for North Wirth Parkway No. 1505, a Tax Increment Financing District Year Ended December 31, 2021 Real estate sales -110- Accounted for Current Amount Budget in Prior Years Year Remaining Sources of funds Bond proceeds –$ 2,008,681$ –$ (2,008,681)$ Tax increments received 8,814,808 1,472,144 592,506 6,750,158 Special assessments – 383,396 40,489 (423,885) Interest income (charges)– 41,371 (1,904)(39,467) Total sources of funds 8,814,808 3,905,592 631,091 4,278,125 Uses of funds Site acquisition and improvements 4,545,891 2,754,883 338,011 1,452,997 Administrative costs 881,480 4,473 – 877,007 Principal – 295,000 200,000 (495,000) Interest and fiscal costs 3,387,437 150,889 37,975 3,198,573 Total uses of funds 8,814,808 3,205,245 575,986 5,033,577 Funds remaining (deficit)–$ 700,347$ 55,105$ (755,452)$ CITY OF GOLDEN VALLEY Schedule of Sources and Uses of Public Funds for Highway 55 West No. 1506, a Tax Increment Financing District Year Ended December 31, 2021 -111- Accounted for Current Amount Budget in Prior Years Year Remaining Sources of funds Tax increments received 1,535,716$ 160,158$ 62,637$ 1,312,921$ Interest income (charges)– 136 (57)(79) Total sources of funds 1,535,716 160,294 62,580 1,312,842 Uses of funds Site acquisition and improvements 687,975 126,195 52,598 509,182 Administrative costs 171,571 – – 171,571 Interest and fiscal costs 676,170 – – 676,170 Total uses of funds 1,535,716 126,195 52,598 1,356,923 Funds remaining (deficit)–$ 34,099$ 9,982$ (44,081)$ CITY OF GOLDEN VALLEY Schedule of Sources and Uses of Public Funds for Cornerstone Creek No. 1507, a Tax Increment Financing District Year Ended December 31, 2021 -112- Accounted for Current Amount Budget in Prior Years Year Remaining Sources of funds Tax increments received 19,052,584$ 1,548,715$ 780,887$ 16,722,982$ Interest income – 1,828 (1,062)(766) Total sources of funds 19,052,584 1,550,543 779,825 16,722,216 Uses of funds Site improvements – utilities 7,913,693 2,566,118 190,155 5,157,420 Administrative costs 1,945,145 – – 1,945,145 Interest and fiscal costs 9,193,746 256,133 64,880 8,872,733 Total uses of funds 19,052,584 2,822,251 255,035 15,975,298 Funds remaining (deficit)–$ (1,271,708)$ 524,790$ 746,918$ CITY OF GOLDEN VALLEY Schedule of Sources and Uses of Public Funds for Winnetka/Medicine Lake (Liberty Crossing) No. 1508, a Tax Increment Financing District Year Ended December 31, 2021 -113- THIS PAGE INTENTIONALLY LEFT BLANK STATISTICAL SECTION (UNAUDITED) THIS PAGE INTENTIONALLY LEFT BLANK Page Contents: Financial Trends 115 Revenue Capacity 127 Debt Capacity 132 Demographic and Economic Information 140 Operating Indicators 142 Source:Unless otherwise noted, the information in these schedules is derived from the ACFR for the relevant year. These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides, and the activities it performs. STATISTICAL SECTION (UNAUDITED) This part of the City of Golden Valley,Minnesota’s (the City) Annual Comprehensive Financial Report (ACFR) presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. These schedules contain information to help the reader assess the City’s most significant revenue source, including the property tax and utility revenue. These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. -114- Fiscal Year 2012 2013 2014 2015 Governmental activities Net investment in capital assets 22,622,764$ 21,829,745$ 21,499,939$ 24,816,606$ Restricted 26,673,032 29,535,846 29,553,484 17,942,353 Unrestricted 7,499,559 9,306,292 14,349,901 15,401,264 Total governmental activities net position 56,795,355$ 60,671,883$ 65,403,324$ 58,160,223$ Business-type activities Net investment in capital assets 27,416,740$ 28,427,621$ 29,588,257$ 30,101,294$ Unrestricted 17,508,592 18,562,323 16,164,578 14,010,619 Total business-type activities net position 44,925,332$ 46,989,944$ 45,752,835$ 44,111,913$ Primary government Net investment in capital assets 50,039,504$ 50,257,366$ 51,088,196$ 54,917,900$ Restricted 26,673,032 29,535,846 29,553,484 17,942,353 Unrestricted 25,008,151 27,868,615 30,514,479 29,411,883 Total primary government net position 101,720,687$ 107,661,827$ 111,156,159$ 102,272,136$ Note 1: Note 2:The City implemented GASB Statement No.75 in 2018,resulting in a restatement of beginning net position for the effects of implementing this standard. Net position for previous years has not been restated. CITY OF GOLDEN VALLEY Net Position by Component Last Ten Fiscal Years (Accrual Basis of Accounting) The City implemented GASB Statement No.68 in 2015,resulting in a restatement of beginning net position for the effects of implementing this standard. Net position for previous years has not been restated. -115- 2016 2017 2018 2019 2020 2021 23,527,470$ 24,239,358$ 27,973,471$ 30,178,374$ 28,994,273$ 32,036,524$ 18,567,757 21,342,170 24,401,665 25,785,567 26,738,440 29,277,763 12,900,989 14,755,485 11,015,315 13,001,567 18,192,074 19,676,353 54,996,216$ 60,337,013$ 63,390,451$ 68,965,508$ 73,924,787$ 80,990,640$ 31,809,835$ 35,854,260$ 36,950,518$ 39,110,394$ 40,380,232$ 40,749,737$ 17,561,589 16,068,264 19,689,949 23,980,781 28,238,723 32,328,662 49,371,424$ 51,922,524$ 56,640,467$ 63,091,175$ 68,618,955$ 73,078,399$ 55,337,305$ 60,093,618$ 64,923,989$ 69,288,768$ 69,374,505$ 72,786,261$ 18,567,757 21,342,170 24,401,665 25,785,567 26,738,440 29,277,763 30,462,578 30,823,749 30,705,264 36,982,348 46,430,797 52,005,015 104,367,640$ 112,259,537$ 120,030,918$ 132,056,683$ 142,543,742$ 154,069,039$ -116- Fiscal Year 2012 2013 2014 2015 Expenses Governmental activities General government 3,121,543$ 2,914,823$ 3,066,025$ 11,327,689$ Public safety 6,906,449 7,310,946 6,831,136 6,907,661 Physical development 9,758,495 10,325,068 11,396,748 13,448,443 Public works – – – – Parks and recreation 1,692,346 1,588,798 1,545,616 1,486,218 Interest and fiscal charges 2,724,495 2,633,359 2,456,490 2,066,076 Total governmental activities expenses 24,203,328 24,772,994 25,296,015 35,236,087 Business-type activities Water and sewer 8,023,803 7,611,927 9,867,531 9,867,731 Storm sewer 1,383,594 1,589,410 1,944,935 1,795,260 Golf course 1,724,174 1,645,728 1,693,028 1,848,745 Motor vehicle licensing 154,492 326,382 326,201 349,019 Recycling 299,809 410,808 393,280 392,239 Total business-type activities expenses 11,585,872 11,584,255 14,224,975 14,252,994 Total primary government expenses 35,789,200$ 36,357,249$ 39,520,990$ 49,489,081$ Program revenues Governmental activities Charges for services General government 263,035$ 279,725$ 276,782$ 263,205$ Public safety 1,628,076 1,861,481 1,837,076 1,985,746 Physical development 400,773 407,938 342,809 415,395 Public works – – – – Parks and recreation 614,164 594,142 534,821 594,130 Operating grants and contributions 464,187 559,246 538,956 600,264 Capital grants and contributions 3,595,000 1,882,698 2,028,250 6,377,610 Total governmental activities program revenues 6,965,235 5,585,230 5,558,694 10,236,350 Business-type activities Charges for services Water and sewer 8,217,582 7,831,307 7,751,250 8,266,107 Storm sewer 2,256,336 2,274,549 2,278,128 2,281,125 Golf course 1,765,186 1,502,897 1,543,151 2,071,141 Motor vehicle licensing 92,626 304,424 347,382 395,718 Recycling 276,190 276,099 323,184 331,630 Operating grants and contributions 128,893 495,451 701,605 209,831 Capital grants and contributions 32,162 852,075 – – Total business-type activities program revenues 12,768,975 13,536,802 12,944,700 13,555,552 Total primary government program revenues 19,734,210$ 19,122,032$ 18,503,394$ 23,791,902$ CITY OF GOLDEN VALLEY Changes in Net Position Last Ten Fiscal Years (Accrual Basis of Accounting) -117- 2016 2017 2018 2019 2020 2021 4,182,777$ 3,260,989$ 3,633,644$ 3,645,284$ 4,169,858$ 3,788,382$ 8,213,351 8,128,614 7,979,009 8,611,294 8,870,757 8,089,691 11,274,790 11,539,091 12,019,371 2,102,527 2,157,872 1,903,327 – – – 9,226,210 9,716,950 10,477,892 1,736,619 2,205,615 2,710,862 2,470,334 2,033,540 2,067,373 2,172,554 2,321,780 1,947,173 1,907,064 1,697,077 1,587,120 27,580,091 27,456,089 28,290,059 27,962,713 28,646,054 27,913,785 8,327,113 8,395,036 9,374,281 8,863,414 9,211,358 9,643,763 1,685,494 2,526,607 1,861,392 2,331,381 2,217,110 1,968,509 2,172,621 2,348,327 3,235,267 3,163,981 2,741,444 3,185,361 401,363 405,407 399,060 410,430 462,777 443,418 407,664 389,472 408,286 477,286 504,119 526,822 12,994,255 14,064,849 15,278,286 15,246,492 15,136,808 15,767,873 40,574,346$ 41,520,938$ 43,568,345$ 43,209,205$ 43,782,862$ 43,681,658$ 223,237$ 238,339$ 267,543$ 209,369$ 225,998$ 206,956$ 2,155,832 3,460,736 2,132,083 537,505 355,245 295,902 400,351 565,550 663,328 1,621,151 1,230,765 1,504,988 – – – 348,830 410,814 315,753 489,959 443,632 981,624 920,139 273,995 353,199 643,970 1,444,260 1,261,435 724,609 617,891 888,261 1,578,699 2,689,043 3,140,938 2,791,326 733,444 3,478,561 5,492,048 8,841,560 8,446,951 7,152,929 3,848,152 7,043,620 8,814,629 9,574,647 10,482,578 10,022,356 10,621,632 11,203,708 2,241,536 2,328,336 2,446,828 2,480,095 2,559,800 2,592,294 2,106,472 2,059,405 2,956,984 3,205,252 2,914,216 3,927,131 457,275 453,215 435,698 477,523 256,748 317,229 378,934 389,894 391,131 408,058 439,160 501,335 167,557 966,871 395,134 188,765 66,990 34,261 1,561,135 1,227,470 398,387 2,795,362 1,605,931 – 15,727,538 16,999,838 17,506,740 19,577,411 18,464,477 18,575,958 21,219,586$ 25,841,398$ 25,953,691$ 26,730,340$ 22,312,629$ 25,619,578$ -118-(continued) Fiscal Year 2012 2013 2014 2015 Net (expense) revenue Governmental activities (17,238,093)$ (19,187,764)$ (19,737,321)$ (24,999,737)$ Business-type activities 1,183,103 1,952,547 (1,280,275) (697,442) Total primary government net expense (16,054,990)$ (17,235,217)$ (21,017,596)$ (25,697,179)$ General revenues and other changes in net position Governmental activities Property taxes 20,946,972$ 21,757,173$ 22,616,003$ 21,934,817$ Franchise taxes 621,585 904,928 1,048,227 1,028,368 Unrestricted grants and contributions – – – – Other general revenues 353,033 338,245 286,108 372,590 Investment earnings (charges)214,493 112,817 347,197 221,237 Gain on sale of capital assets 76,852 24,735 71,227 18,337 Transfers 118,523 (73,606) 100,000 100,000 Total governmental activities 22,331,458 23,064,292 24,468,762 23,675,349 Business-type activities Franchise taxes – – – – Other general revenues 65,978 – – – Investment earnings (charges)96,035 38,459 142,866 122,591 Transfers (118,523) 73,606 (100,000) (100,000) Total business-type activities 43,490 112,065 42,866 22,591 Total primary government 22,374,948$ 23,176,357$ 24,511,628$ 23,697,940$ Changes in net position Governmental activities 5,093,365$ 3,876,528$ 4,731,441$ (1,324,388)$ Business-type activities 1,226,593 2,064,612 (1,237,409) (674,851) Total primary government 6,319,958$ 5,941,140$ 3,494,032$ (1,999,239)$ Note:The City reorganized its governmental activities functions in 2019,creating a separate public works function and moving certain other departments between functions to better reflect the organization of city operations. (Accrual Basis of Accounting) CITY OF GOLDEN VALLEY Changes in Net Position (continued) Last Ten Fiscal Years -119- 2016 2017 2018 2019 2020 2021 (22,088,043)$ (18,614,529)$ (19,843,108)$ (20,809,784)$ (24,797,902)$ (20,870,165)$ 2,733,283 2,934,989 2,228,454 4,330,919 3,327,669 2,808,085 (19,354,760)$ (15,679,540)$ (17,614,654)$ (16,478,865)$ (21,470,233)$ (18,062,080)$ 19,473,750$ 21,419,195$ 22,825,055$ 24,399,021$ 26,593,034$ 27,352,013$ 402,017 687,773 836,780 719,131 750,959 772,266 – – – – 1,693,378 16,398 347,543 291,837 264,266 165,936 122,994 80,706 313,888 522,746 788,823 1,032,727 788,401 (204,549) 56,838 3,775 80,997 101,526 11,876 121,369 (1,670,000) 1,030,000 (1,149,855) (33,500) (203,461) (202,185) 18,924,036 23,955,326 23,646,066 26,384,841 29,757,181 27,936,018 700,000 400,000 1,000,000 1,500,000 1,500,000 1,500,000 – – – – – – 156,228 246,111 339,634 586,289 496,650 (50,826) 1,670,000 (1,030,000) 1,149,855 33,500 203,461 202,185 2,526,228 (383,889) 2,489,489 2,119,789 2,200,111 1,651,359 21,450,264$ 23,571,437$ 26,135,555$ 28,504,630$ 31,957,292$ 29,587,377$ (3,164,007)$ 5,340,797$ 3,802,958$ 5,575,057$ 4,959,279$ 7,065,853$ 5,259,511 2,551,100 4,717,943 6,450,708 5,527,780 4,459,444 2,095,504$ 7,891,897$ 8,520,901$ 12,025,765$ 10,487,059$ 11,525,297$ -120- THIS PAGE INTENTIONALLY LEFT BLANK Ad Valorem Property Taxes Tax Increments Franchise Taxes Total 16,219,048$ 4,627,924$ 621,585$ 21,468,557$ 16,922,610 4,834,563 904,928 22,662,101 17,431,741 5,184,262 1,048,227 23,664,230 21,911,378 23,439 1,028,368 22,963,185 19,449,023 24,727 402,017 19,875,767 21,398,275 20,920 687,773 22,106,968 22,178,550 646,505 836,780 23,661,835 23,292,820 1,106,201 719,131 25,118,152 25,101,371 1,491,663 750,959 27,343,993 25,886,865 1,465,148 772,266 28,124,279 Fiscal Year 2016 2012 2013 2014 2015 2017 2018 2019 2020 2021 CITY OF GOLDEN VALLEY Governmental Activities Tax Revenues by Source Last Ten Fiscal Years (Accrual Basis of Accounting) -121- Fiscal Year 2012 2013 2014 2015 General Fund Nonspendable –$ –$ 1,256$ 7,617$ Committed – – – – Assigned 1,560,000 1,500,000 1,500,000 2,000,000 Unassigned 7,756,057 8,207,985 8,640,108 8,719,447 Total General Fund 9,316,057$ 9,707,985$ 10,141,364$ 10,727,064$ All other governmental funds Nonspendable –$ –$ –$ 285$ Restricted 33,693,776 43,287,123 47,308,126 33,222,298 Committed 687,458 718,723 743,633 202,270 Assigned 8,106,763 7,032,562 7,224,030 11,357,732 Unassigned, reported in Capital project funds – – – (41,288) Total all other governmental funds 42,487,997$ 51,038,408$ 55,275,789$ 44,741,297$ CITY OF GOLDEN VALLEY Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -122- `` 2016 2017 2018 2019 2020 2021 18,822$ 3,610$ –$ 14,029$ 23,010$ 26,653$ – – – 111,960 111,960 – 2,000,000 2,000,000 2,045,000 3,350,000 4,350,000 2,269,499 8,954,274 10,400,239 11,014,502 11,676,100 13,192,079 13,258,756 10,973,096$ 12,403,849$ 13,059,502$ 15,152,089$ 17,677,049$ 15,554,908$ –$ –$ –$ –$ –$ –$ 44,457,090 32,513,969 26,311,344 21,568,499 22,904,513 22,970,466 208,846 213,524 213,624 212,939 127,269 161,790 11,702,718 13,355,185 10,183,554 9,910,623 11,513,179 13,215,884 (1,023,153) (1,066,647) (2,164,862) (1,825,910) (1,271,708) (746,918) 55,345,501$ 45,016,031$ 34,543,660$ 29,866,151$ 33,273,253$ 35,601,222$ -123- Fiscal Year 2012 2013 2014 2015 Revenues Taxes 16,378,425$ 16,847,769$ 17,334,800$ 21,874,958$ Tax increments 4,627,924 4,834,563 5,184,262 23,439 Special assessments 1,273,820 1,223,120 1,217,205 1,060,839 Franchise taxes 621,585 904,928 1,048,227 1,028,368 Licenses and permits 1,223,848 1,496,453 1,479,304 1,626,113 Intergovernmental 3,452,180 984,620 1,410,427 4,717,848 Charges for services 1,876,117 1,889,478 1,718,592 1,607,143 Fines and forfeits 351,413 366,059 310,318 354,066 Investment income (charges)201,966 107,763 328,554 209,866 Other revenue 617,366 650,750 716,133 879,395 Total revenues 30,624,644 29,305,503 30,747,822 33,382,035 Expenditures General government 1,297,470 1,268,041 1,310,190 9,340,987 Administrative services 1,513,689 1,558,386 1,682,784 1,712,183 Casualty insurance 237,152 222,559 240,918 169,213 Public safety 6,462,507 6,594,376 6,156,396 6,116,997 Physical development 4,083,857 4,142,979 5,051,206 4,790,646 Public works – – – – Parks and recreation 1,183,579 1,183,263 1,028,809 1,092,198 Capital outlay – not capitalized 1,003,343 1,575,739 1,779,425 3,943,954 Construction/acquisition of capital assets 5,533,344 4,623,106 5,043,790 8,312,307 Debt service Principal retirement 5,185,000 6,295,000 8,720,000 9,320,000 Interest and fiscal charges 2,944,445 2,833,093 2,695,660 2,405,710 Total expenditures 29,444,386 30,296,542 33,709,178 47,204,195 Excess of revenues over (under) expenditures 1,180,258 (991,039) (2,961,356) (13,822,160) Other financing sources (uses) Sale of capital assets 83,669 80,875 222,432 53,442 Bonds issued 2,300,000 2,485,000 3,085,000 2,670,000 Refunding bonds issued 5,960,000 9,100,000 3,950,000 6,600,000 Premiums on debt issues 166,050 452,503 274,684 164,926 Payments to refunded bond escrow agent (4,970,000) (2,085,000) – (5,715,000) Transfers in 4,448,233 6,448,710 6,545,710 5,742,041 Transfers (out)(4,329,710) (6,548,710) (6,445,710) (5,642,041) Total other financing sources (uses)3,658,242 9,933,378 7,632,116 3,873,368 Net change in fund balances 4,838,500$ 8,942,339$ 4,670,760$ (9,948,792)$ Debt service as a percentage of noncapital expenditures 34.0%35.6%39.8%30.1% Note:The City reorganized its governmental activities functions in 2019,creating a separate public works function and moving certain other departments between functions to better reflect the organization of city operations. CITY OF GOLDEN VALLEY Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -124- 2016 2017 2018 2019 2020 2021 19,539,516$ 21,388,915$ 22,175,461$ 23,266,074$ 24,836,506$ 26,146,076$ 24,727 20,920 646,505 1,106,201 1,491,663 1,465,148 806,891 1,106,697 1,050,049 1,057,652 592,614 774,362 402,017 687,773 836,780 719,131 750,959 772,266 1,859,208 3,141,910 1,778,321 1,705,864 1,350,417 1,595,716 1,554,964 2,181,104 3,032,083 1,760,103 2,366,086 821,731 1,544,898 1,577,194 2,070,277 2,160,237 1,210,902 1,433,460 283,483 400,233 379,708 260,565 148,672 127,096 302,230 503,416 752,246 978,546 747,355 (191,110) 727,904 679,913 883,449 528,833 587,356 484,126 27,045,838 31,688,075 33,604,879 33,543,206 34,082,530 33,428,871 1,299,871 1,325,205 1,362,468 1,404,362 1,779,000 1,780,998 1,812,545 1,860,542 1,963,163 1,967,267 2,213,472 2,308,688 154,842 225,617 318,934 316,206 318,902 269,420 6,563,064 6,937,709 7,048,837 7,312,126 7,817,588 7,621,891 5,188,881 5,152,616 5,738,929 2,053,347 2,222,461 2,095,315 – – – 4,051,707 3,942,738 4,499,814 1,078,032 1,192,679 1,496,138 1,454,209 1,170,725 1,241,033 1,262,482 1,501,845 2,025,000 365,612 589,793 1,044,253 10,192,081 22,281,092 11,046,962 7,263,621 1,617,652 6,734,018 4,960,000 4,905,000 5,715,000 5,670,000 5,100,000 7,390,000 2,305,673 2,460,593 2,426,163 2,174,818 1,942,181 1,877,201 34,817,471 47,842,898 39,141,594 34,033,275 28,714,512 36,862,631 (7,771,633) (16,154,823) (5,536,715) (490,069) 5,368,018 (3,433,760) 80,627 143,274 239,795 200,217 147,736 263,333 25,130,000 5,330,000 2,950,000 1,770,000 – 3,420,000 – 4,100,000 – – – – 1,026,242 537,832 31,117 188,430 – 158,440 (6,945,000) (3,885,000) (6,345,000) (4,220,000) – – 2,551,950 4,144,838 5,276,409 2,757,128 3,357,604 6,427,360 (3,221,950) (3,114,838) (6,432,324) (2,790,628) (2,941,296) (6,629,545) 18,621,869 7,256,106 (4,280,003) (2,094,853) 564,044 3,639,588 10,850,236$ (8,898,717)$ (9,816,718)$ (2,584,922)$ 5,932,062$ 205,828$ 29.5%28.8%29.0%29.3%26.0%30.8% -125- THIS PAGE INTENTIONALLY LEFT BLANK Ad Valorem Property Tax Tax Increments Franchise Tax Total 16,378,425$ 4,627,924$ 621,585$ 21,627,934$ 16,847,769 4,834,563 904,928 22,587,260 17,334,800 5,184,262 1,048,227 23,567,289 21,874,958 23,439 1,028,368 22,926,765 19,539,516 24,727 402,017 19,966,260 21,388,915 20,920 687,773 22,097,608 22,175,461 646,505 836,780 23,658,746 23,266,074 1,106,201 719,131 25,091,406 24,836,506 1,491,663 750,959 27,079,128 26,146,076 1,465,148 772,266 28,383,490 Fiscal Year 2016 2012 2013 2014 2015 2017 2018 2019 2020 2021 CITY OF GOLDEN VALLEY General Governmental Tax Revenues by Source Last Ten Fiscal Years (Modified Accrual Basis of Accounting) -126- Fiscal Disparities Decrease From Applied Real Property Personal Property Contribution Tax Increments Tax Capacity 36,478,494$ 320,766$ (5,875,187)$ (3,242,617)$ 27,681,456$ 35,693,380 416,456 (5,460,857) (3,275,801) 27,373,178 35,543,286 413,722 (5,888,222) (3,352,209) 26,716,577 37,743,877 423,575 (5,994,022) (20,214) 32,153,216 40,233,072 433,290 (5,880,892) (21,325) 34,764,145 42,748,968 472,938 (6,636,623) (21,692) 36,563,591 45,436,776 505,617 (6,748,649) (472,613) 38,721,131 49,442,493 525,094 (7,107,691) (834,500) 42,025,396 53,111,161 566,562 (7,678,701) (1,151,026) 44,847,996 55,644,963 604,764 (7,680,860) (1,184,458) 47,384,409 (1) Source: Tax rates are expressed in terms of “net tax capacity.”A property’s tax capacity is determined by multiplying its taxable market value by a state determined class rate. Class rates vary by property type and change periodically based on state legislation. Hennepin County 2015 2014 2016 2017 2013 2012 2019 2018 2021 in Fiscal Year Levy Collectible 2020 CITY OF GOLDEN VALLEY Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Tax Capacities (1) -127- Total City Tax Capacity Estimated Actual Rate Applied Taxable Value 55.80 2,829,369,027$ 0.98 % 58.21 2,744,389,240 1.00 61.84 2,719,232,050 0.98 54.63 2,934,477,667 1.10 54.45 3,097,563,064 1.12 56.11 3,271,878,353 1.12 55.15 3,523,108,955 1.10 53.78 3,842,319,483 1.09 53.40 4,136,243,370 1.08 52.44 4,325,815,780 1.10 Actual Value Percentage of Value as a Assessed -128- Total Direct and Hennepin ISD No. 281 Special Overlapping General Levy Debt Levy City Total County Robbinsdale Districts Rates 41.82 13.98 55.80 48.23 32.81 10.14 146.98 43.00 15.21 58.21 49.46 32.35 10.93 150.95 45.51 16.33 61.84 49.96 34.78 11.30 157.88 40.46 14.17 54.63 46.40 33.22 10.56 144.81 39.72 14.73 54.45 45.36 33.83 10.43 144.07 39.08 17.03 56.11 44.09 31.61 10.20 142.01 42.87 12.28 55.15 42.81 31.96 8.98 138.90 42.22 11.56 53.78 41.86 29.91 9.42 134.97 41.85 11.55 53.40 41.08 26.45 9.07 130.00 40.83 11.61 52.44 38.21 25.53 8.75 124.93 Total Direct and Hennepin ISD No. 270 Special Overlapping General Levy Debt Levy City Total County Hopkins Districts Rates 41.82 13.98 55.80 48.23 29.27 10.14 143.44 43.00 15.21 58.21 49.46 29.73 10.93 148.33 45.51 16.33 61.84 49.96 32.36 11.30 155.46 40.46 14.17 54.63 46.40 30.34 10.56 141.93 39.72 14.73 54.45 45.36 28.51 10.43 138.75 39.08 17.03 56.11 44.09 25.61 10.20 136.01 42.87 12.28 55.15 42.81 29.03 8.98 135.97 42.22 11.56 53.78 41.86 27.02 9.42 132.08 41.85 11.55 53.40 41.08 27.19 9.07 130.74 40.83 11.61 52.44 38.21 26.48 8.75 125.88 (1) (2) Source:Hennepin County 2012 2017 Overlapping rates are those of local and county governments that apply to property owners within the City.Not all overlapping rates apply to all city property owners (e.g.,the rates for special districts apply only to the proportion of the government’s property owners whose property is located within the geographic boundaries of the special district). 2013 2014 2015 2016 Overlapping Rates 2020 2020 2021 2021 2018 2019 Information reflects total tax rates levied by each entity.Tax rates are expressed in terms of “net tax capacity.”A property’s tax capacity is determined by multiplying its taxable market value by a state determined class rate.Class rates vary by property type and change periodically based on state legislation. 2014 CITY OF GOLDEN VALLEY Property Tax Rates (1) Direct and Overlapping (2) Governments Last Ten Fiscal Years Year For the City/ISD No. 281 – Robbinsdale Overlapping RatesDirect Rates 2019 For the City/ISD No. 270 – Hopkins 2012 Direct Rates Year 2017 2016 2015 2013 2018 -129- Net Tax Net Tax Capacity Rank Capacity Rank General Mills, Inc.2,021,180$ 1 4.3 %1,843,700$ 1 6.7 % Allianz Life Insurance Company 1,719,650 2 3.6 1,281,790 2 4.6 Sof-XI Colonnade Owner LLC 1,477,250 3 3.1 – – – ALTUS Golden Hills LLC 959,750 4 2.0 – – – 394 Associates LLC 800,850 5 1.7 – – – North Wirth Associates 548,830 6 1.2 253,330 7 0.9 Liberty Xing Investment Partners 545,830 7 1.2 – – – IRET Properties LP 532,475 8 1.1 – – – Golden Villas LLC 493,363 9 1.0 – – – TCA Real Estate, LLC 385,050 10 0.8 214,550 8 0.8 DRA Advisors LLC – – – 820,770 3 3.0 Golden Jack, LLC – – – 561,990 4 2.0 United Healthcare – – – 402,130 5 1.5 Honeywell Incorporated – – – 274,750 6 1.0 Menards, Inc.– – – 211,070 9 0.8 The Luther Company, LLP – – – 206,790 10 0.7 Total 9,484,228$ 20.0 %6,070,870$ 21.9 % Source:Hennepin County Current Year and Nine Years Ago Principal Property Taxpayers CITY OF GOLDEN VALLEY Percentage of 2021 2012 Percentage of Applied Tax CapacityTaxpayerCapacity Applied Tax -130- THIS PAGE INTENTIONALLY LEFT BLANK Total Tax Collections in Levy for Subsequent Fiscal Year (2)Amount (3)Years (4)Amount 16,395,177$ 16,274,052$ 99.3 %121,125$ 16,395,177$ 100.0 % 16,932,407 16,777,814 99.1 151,812 16,929,626 100.0 17,403,839 17,242,324 99.1 159,610 17,401,934 100.0 18,546,364 18,391,561 99.2 146,941 18,538,502 100.0 19,603,886 19,511,104 99.5 92,782 19,603,886 100.0 21,314,250 21,246,826 99.7 59,089 21,305,915 100.0 22,365,161 22,297,307 99.7 48,365 22,345,672 99.9 23,539,855 23,439,259 99.6 57,850 23,497,109 99.8 25,073,550 24,783,738 98.8 188,217 24,971,955 99.6 26,153,341 25,964,849 99.3 – 25,964,849 99.3 (1) (2) (3) (4) 2020 Does not include tax increments levied and collected. Total levy is net of current year cancellations and abatements. Total tax levy and current tax collections include state paid tax credits. Includes county adjustments for prior year over collections, cancellations, and abatements. 2021 2019 2018 Total Collections to Date Property Tax Levies and Collections (1) 2017 2015 Last Ten Fiscal Years of Levy Ended 2013 2012 2016 2014 December 31, Percentage Collected Within the CITY OF GOLDEN VALLEY Fiscal Year of Levy Percentage Fiscal Year of the Levy -131- Special Street Certificates Tax Tax Lease Assessment Reconstruction of Abatement Increment State Aid Revenue Bonds Bonds Indebtedness Bonds Bonds Street Bonds Bonds 56,350,000$ –$ 2,095,000$ 2,420,000$ 11,565,000$ 2,090,000$ –$ 62,230,000 – 2,145,000 2,075,000 9,290,000 1,985,000 – 65,320,000 – 2,205,000 1,705,000 4,935,000 1,875,000 – 64,860,000 – 2,295,000 1,360,000 – 1,760,000 – 55,455,000 5,630,000 2,350,000 1,015,000 – 1,640,000 17,410,000 55,340,000 5,630,000 2,400,000 670,000 1,170,000 1,520,000 17,410,000 48,175,000 5,405,000 1,620,000 330,000 1,170,000 1,395,000 16,935,000 42,205,000 5,180,000 820,000 – 1,155,000 1,265,000 16,285,000 38,800,000 4,950,000 280,000 – 1,035,000 1,130,000 15,615,000 36,300,000 4,715,000 – – 915,000 985,000 14,925,000 (1) Note: Last Ten Fiscal Years Ratios of Outstanding Debt by Type CITY OF GOLDEN VALLEY Governmental Activities Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. See the Schedule of Demographic and Economic Statistics for personal income and population data. 2013 2014 2015 2016 2018 2019 2020 2021 Fiscal Year 2017 2012 -132- Net Net Premiums Utility Premiums Total Primary (Discounts)Total Revenue Bonds (Discounts)Total Government Per Capita (1) 819,122$ 75,339,122$ 2,870,000$ –$ 2,870,000$ 78,209,122$ 6.59 %3,789$ 1,116,249 78,841,249 2,550,000 – 2,550,000 81,391,249 6.68 3,935 1,221,767 77,261,767 1,040,000 – 1,040,000 78,301,767 6.21 3,766 1,200,577 71,475,577 910,000 – 910,000 72,385,577 5.25 3,356 2,043,531 85,543,531 2,580,000 41,745 2,621,745 88,165,276 6.27 4,090 2,352,017 86,492,017 2,580,000 39,688 2,619,688 89,111,705 6.11 4,117 2,084,966 77,114,966 2,580,000 37,631 2,617,631 79,732,597 5.20 3,695 2,068,449 68,978,449 2,580,000 35,574 2,615,574 71,594,023 4.22 3,152 1,876,422 63,686,422 2,460,000 33,517 2,493,517 66,179,939 3.83 2,935 1,800,991 59,640,991 2,340,000 31,460 2,371,460 62,012,451 3.18 2,750 Business-Type ActivitiesGovernmental Activities Percentage Income (1) of Personal -133- Less Amounts General Restricted for Obligation Repaying Bonds (1)Principal (2)Total Per Capita (4) 75,339,122$ 18,481,388$ 56,857,734$ 2.01 %2,754$ 78,841,249 28,063,240 50,778,009 1.85 2,455 77,261,767 32,650,606 44,611,161 1.64 2,146 71,475,577 28,040,782 43,434,795 1.48 2,014 85,543,531 21,578,026 63,965,505 2.07 2,967 86,492,017 23,277,113 63,214,904 1.93 2,920 77,114,966 16,334,331 60,780,635 1.73 2,817 68,978,449 11,741,205 57,237,244 1.49 2,520 63,686,422 11,591,023 52,095,399 1.26 2,310 59,640,991 11,700,328 47,940,663 1.11 2,126 (1) (2) (3) (4) Note: 2021 2015 Fiscal Year Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. Reported net of premiums and discounts. Does not include revenue bonds. Tax increment, special assessment, and tax abatement bonds are included because property taxes will be levied to pay the debt service on these issues should the primary sources fail to provide adequate revenue. 2012 The amounts restricted for repaying principal include the amounts restricted in all debt service funds for future debt service.We believe this is the most accurate and consistent representation of the resources restricted for debt service when crossover refunding bond proceeds are being held in escrow,as those resources are not included in the governmental activities net position restricted for debt service, due to conversion for full accrual accounting. 2016 2017 Population data can be found in the Schedule of Demographic and Economic Statistics. 2014 See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for property value data. 2018 2019 2020 2013 of Property (3) CITY OF GOLDEN VALLEY Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years Taxable Value Estimated Actual Percentage of -134- Estimated Debt Share of Outstanding (1)Overlapping Debt Direct debt City of Golden Valley 59,640,991$ 100.00 %59,640,991$ Overlapping debt ISD No. 270, Hopkins 155,731,784 19.59 30,507,856 ISD No. 281, Robbinsdale 182,380,501 18.08 32,974,395 ISD No. 283, St. Louis Park 124,472,934 0.02 24,895 Hennepin County 1,037,033,516 2.29 23,748,068 Hennepin Suburban Park District 45,542,541 3.25 1,480,133 Hennepin Regional Railroad Authority 89,332,530 2.29 2,045,715 Metropolitan Council 73,049,600 1.12 818,156 Total overlapping debt 1,707,543,406$ 91,599,218 Total direct and overlapping debt 151,240,209$ Percentage Governmental Unit Source: Applicable (1) Note: (1)Special assessment, tax abatement, tax increment, lease revenue, and state-aid street bonds have been included in this table because property taxes will be used to pay the debt on these issues should other revenue sources fail to provide adequate amounts. Overlapping governments are those that coincide,at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City’s ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident and, therefore, responsible for repaying the debt of each overlapping government. Hennepin County Taxpayer Services CITY OF GOLDEN VALLEY Direct and Overlapping Governmental Activities Debt as of December 31, 2021 Estimated -135- Fiscal Year 2012 2013 2014 2015 Debt limit 84,881,071$ 82,331,677$ 81,576,962$ 88,034,330$ Total net debt applicable to the limit 1,784,770 2,927,363 2,833,906 1,712,141 Legal debt margin 83,096,301$ 79,404,314$ 78,743,056$ 86,322,189$ Total net debt applicable to the limit as a percentage of the debt limit 2.10% 3.56% 3.47% 1.94% Note: CITY OF GOLDEN VALLEY Under state finance law, the City’s outstanding general obligation debt should not exceed 3 percent of total market property value.By law, the general obligation debt subject to the limitation may be offset by amounts set aside for repaying general obligation bonds. Last Ten Fiscal Years Legal Debt Margin Information -136- 2016 2017 2018 2019 2020 2021 92,926,892$ 98,156,351$ 105,693,269$ 115,269,584$ 124,087,301$ 129,774,473$ 7,032,733 6,800,074 5,732,558 4,630,783 4,385,269 4,417,473 85,894,159$ 91,356,277$ 99,960,711$ 110,638,801$ 119,702,032$ 125,357,000$ 7.57% 6.93% 5.42% 4.02% 3.53% 3.40% Market value 4,325,815,780$ Debt limit (3% of market value)129,774,473 Total bonded debt 60,180,000$ Less Debt not payable primarily from tax levies Special assessment bonds 36,300,000 Tax increment bonds 915,000 State aid street bonds 985,000 Lease revenue bonds 14,925,000 Utility revenue bonds 2,340,000 Fund balances available for tax supported debt 297,527 Total net debt applicable to the limit 4,417,473 Legal debt margin 125,357,000$ Legal Debt Margin Calculation for Fiscal Year 2021 -137- Less Operating Net Available Gross Revenue Expenses Revenue Principal Interest 2,384,379$ 1,269,110$ 1,115,269$ 305,000$ 128,123$ 2,502,536 1,470,273 1,032,263 320,000 118,749 2,483,612 1,871,604 612,008 1,510,000 (2)94,968 2,455,263 1,748,165 707,098 130,000 41,718 2,406,073 1,567,226 838,847 910,000 (3)90,099 3,330,505 2,465,516 864,989 – 50,191 2,952,615 1,803,506 1,149,109 – 63,950 2,774,078 2,253,908 520,170 – 63,950 2,806,204 2,165,598 640,606 120,000 62,300 2,599,053 1,992,442 606,611 120,000 60,350 (1) (2) (3) (4) Note: 2020 2018 CITY OF GOLDEN VALLEY Pledged Revenue Coverage Last Ten Fiscal Years Fiscal Year Debt Service Details regarding the City’s outstanding debt can be found in the notes to basic financial statements. Gross revenue includes investment earnings and intergovernmental grants. Operating expenses do not include interest. Excludes principal refunded from the proceeds of refunding bond issues. Revenue Bonds (1) In 2014,the City used available funds to exercise an early call provision and retire $1,180,000 of utility revenue bonds before their stated maturity dates. Utility revenue bonds, payable from the Storm Sewer Utility Fund. In 2016, the City used available funds to exercise an early call provision and retire $775,000 of utility revenue bonds before their stated maturity dates. 2017 2016 2015 2014 2013 2012 2019 2021 -138- Special Assessment Coverage Collections Principal (4)Interest Coverage 2.57 1,142,945$ 2,855,000$ 1,975,259$ 0.24 2.35 1,223,120 2,880,000 1,955,697 0.25 0.38 1,124,414 3,195,000 2,047,723 0.21 4.12 980,375 3,215,000 1,999,619 0.19 0.84 667,606 3,750,000 1,826,001 0.12 17.23 1,039,971 3,675,000 1,510,438 0.20 17.97 731,351 3,770,000 1,404,916 0.14 8.13 1,189,401 3,520,000 1,191,082 0.25 3.51 521,297 3,405,000 1,088,847 0.12 3.36 709,213 6,040,000 1,040,894 0.10 Special Assessment Bonds Debt Service -139- Per Capita Personal Personal School Population (1)Income (2)Income (3)Enrollment (4) 20,642 1,186,419,592$ 57,476$ 2,078 4.8 % 20,683 1,218,187,334 58,898 2,088 4.1 20,790 1,259,894,790 60,601 2,074 3.2 21,571 1,378,408,471 63,901 2,115 3.2 21,556 1,406,119,436 65,231 1,994 3.6 21,646 1,459,524,842 67,427 2,074 2.9 21,580 1,533,625,860 71,067 2,085 2.8 22,715 1,696,765,070 74,698 2,084 3.0 22,552 1,726,400,704 76,552 2,018 4.5 22,552 1,951,244,144 86,522 2,022 2.4 (1)Metropolitan Council – Regional Statistics and Data except for 2021 – City estimate. (2) (3) (4) (5) 2014 Bureau of Economic Analysis, U.S. Department of Commerce –Hennepin County. The per capita personal income used is for that of Hennepin County,in which the City resides, the smallest region applicable to the City that this information is available. Minnesota Department of Economic Security – Hennepin County. School districts. 2012 2013 2015 2016 This estimated personal income number is calculated by taking the per capita personal income of Hennepin County and multiplying it by the City’s population. Also see note (3) regarding the per capita personal income figures. 2017 2018 2019 2020 2021 Sources: CITY OF GOLDEN VALLEY Rate (5) UnemploymentFiscal Demographic and Economic Statistics Last Ten Fiscal Years Year -140- Employees Rank Employees Rank General Mills, Inc.4,500 1 13.1 %5,500 1 16.0 % Allianz Life Insurance Company 1,800 2 5.2 2,096 3 6.1 OptumHealth 1,700 3 4.9 1,700 4 4.9 Honeywell Incorporated 1,700 3 4.9 1,350 5 3.9 G.H. Tennant Company 729 5 2.1 700 6 2.0 M.A. Mortenson 600 6 1.7 2,102 2 6.1 Courage Center 450 7 1.3 600 7 1.7 Preferred One 368 8 1.1 315 9 0.9 Liberty Carton 360 9 1.0 – – – Breck School 338 10 1.0 – – – Jim Lupient Oldsmobile – – – 325 8 0.9 McKesson Corporation – – – 300 10 0.9 Total 12,545 36.5 %14,988 43.6 % Source:Metropolitan Council – Regional Statistics and Data Employer Employment CITY OF GOLDEN VALLEY Employment of Total City Percentage 2012 Percentage Current Year and Nine Years Ago 2021 of Total City Principal Employers -141- Fiscal Year 2012 2013 2014 2015 Function General government 17.10 23.10 23.10 23.50 Public safety 50.75 44.75 47.25 47.25 Physical development 30.66 31.66 30.66 29.66 Public works – – – – Parks and recreation 5.50 5.50 5.50 5.50 Water and sewer 11.34 12.34 12.34 12.34 Storm sewer – – 1.00 1.00 Golf course 7.00 7.00 7.00 7.00 Motor vehicle licensing 4.00 4.00 4.00 4.00 Total 126.35 128.35 130.85 130.25 Note: Source: Various city departments CITY OF GOLDEN VALLEY Full-Time Equivalent City Government Employees by Function Last Ten Fiscal Years The City reorganized its governmental functions in 2019,creating a separate public works function and moving certain other departments between functions to better reflect the organization of city operations. -142- `` 2016 2017 2018 2019 2020 2021 23.50 23.50 24.25 17.00 18.00 19.00 47.25 47.50 47.50 48.50 51.50 50.50 29.66 29.66 29.66 18.00 18.00 18.00 – – – 20.66 20.66 20.66 5.50 7.50 7.50 8.38 8.38 8.38 12.34 12.34 12.34 12.34 12.34 12.34 1.00 1.00 1.00 1.00 1.00 1.00 7.00 8.50 8.50 11.00 11.00 11.00 4.00 4.00 4.00 5.00 5.00 5.00 130.25 134.00 134.75 141.88 145.88 145.88 -143- Fiscal Year 2012 2013 2014 2015 Function 1,399 1,103 905 1,025 70 61 38 33 Citations written 3,828 3,524 3,488 3,138 Fire 648 797 631 711 1.2 1.0 1.2 1.2 Water New (removed) connections (5)2 8 (1) Water main breaks 26 10 30 28 Average daily consumption (thousands of gallons)2,765 2,518 2,213 2,156 Source:Various city departments CITY OF GOLDEN VALLEY Street resurfacing (miles) Adult arrests Juvenile arrests Number of calls answered Highways and streets Police Last Ten Fiscal Years Operating Indicators by Function -144- 2016 2017 2018 2019 2020 2021 1,027 817 906 681 461 244 20 29 41 51 28 4 2,659 4,761 3,465 2,180 1,251 708 747 649 643 734 724 651 0.5 1.2 1.3 1.6 – 1.3 9 46 37 5 – 8 15 11 22 14 28 36 2,106 2,171 2,275 1,849 1,860 2,119 -145- Fiscal Year 2012 2013 2014 2015 Function Public safety Police Stations 1 1 1 1 Patrol units 8 8 8 8 Fire stations 3 3 3 3 Highways and streets Streets (miles)144 144 144 144 Streetlights 1,838 1,840 1,840 1,840 Parks and recreation Parks acreage 462 462 462 462 Parks and nature areas 30 30 30 30 Tennis court locations 9 9 9 9 Community centers 2 2 2 2 Water Connections 7,139 7,141 7,149 7,148 Sewer Connections 7,169 7,179 7,188 7,234 Source:Various city departments CITY OF GOLDEN VALLEY Capital Asset Statistics by Function Last Ten Fiscal Years -146- 2016 2017 2018 2019 2020 2021 1 1 1 1 1 1 8 8 8 8 8 8 3 3 3 3 3 3 144 144 144 144 144 144 1,836 1,813 1,942 1,942 2,209 2,219 462 462 462 462 462 462 30 30 30 30 30 30 9 9 9 9 9 9 2 2 2 2 2 2 7,157 7,203 7,240 7,245 7,245 7,253 7,205 7,249 7,288 7,296 7,299 7,361 -147- THIS PAGE INTENTIONALLY LEFT BLANK