Comprehensive Annual Financial Report - 2016city of
golden
valley Comprehensive
Annual Financial Report
For the Fiscal Year Ended December 31, 2016 • Golden Valley, Minnesota
CITY OF GOLDEN VALLEY
HENNEPIN COUNTY, MINNESOTA
Comprehensive Annual Financial Report
for Year Ended
December 31, 2016
Prepared by
Finance Department
Sue Virnig — Finance Director
Sue Watson — Accounting Coordinator
Wanita Williams — Accountant
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CITY OF GOLDEN VALLEY
HENNEPIN COUNTY, MINNESOTA
Table of Contents
Page
INTRODUCTORY SECTION
CITY COUNCIL AND OTHER OFFICIALS
ORGANIZATIONAL CHART BY DIVISION ii
FINANCE DIRECTOR'S LETTER OF TRANSMITTAL iii—vii
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE
IN FINANCIAL REPORTING 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
72
Governmental Funds
72
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 —
75
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
36-70
REQUIRED SUPPLEMENTARY INFORMATION
Other Post -Employment Benefits Plan
Schedule of Funding Progress
71
PERA — Public Employees General Employees Retirement Fund
Schedule of City's and Non -Employer Proportionate Share of Net Pension Liability
72
Schedule of City Contributions
72
PERA — Public Employees Police and Fire Fund
Schedule of City's Proportionate Share of Net Pension Liability
73
Schedule of City Contributions
73
Golden Valley Fire Department Relief Association
Schedule of Changes in Net Pension Asset and Related Ratios
74
Schedule of City Contributions and Non -Employer Contributing Entities
75
CITY OF GOLDEN VALLEY
HENNEPIN COUNTY, MINNESOTA
Table of Contents (continued)
Page
SUPPLEMENTAL INFORMATION
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Nonmajor Governmental Funds
76
Combining Balance Sheet
77
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
78
Nonmajor Special Revenue Funds
106-107
Combining Balance Sheet
79
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
80
Nonmajor Debt Service Funds
111-112
Combining Balance Sheet
81
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
82
Nonmajor Capital Project Funds
115
Combining Balance Sheet
83-84
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
85-86
General Fund
119
Schedule of Revenue — Budget and Actual
87
Schedule of Expenditures — Budget and Actual
88-89
Internal Service Funds
90
Combining Statement of Net Position
91
Combining Statement of Revenue, Expenses, and Changes in Net Position
92
Combining Statement of Cash Flows
93
OTHER CITY INFORMATION
Schedules of Sources and Uses of Public Funds for Tax Increment Financing Districts
North Wirth Parkway No. 1505 94
Highway 55 West No. 1506 95
Cornerstone Creek No. 1507 96
Winnetka/Medicine Lake (Liberty Crossing) No. 1508 97
STATISTICAL SECTION (UNAUDITED) 98
Net Position by Component
99-100
Changes in Net Position
101-104
Governmental Activities Tax Revenues by Source
105
Fund Balances of Governmental Funds
106-107
Changes in Fund Balances of Governmental Funds
108-109
General Governmental Tax Revenues by Source
110
Assessed Value and Estimated Actual Value of Taxable Property
111-112
Property Tax Rates
113
Principal Property Taxpayers
114
Property Tax Levies and Collections
115
Ratios of Outstanding Debt by Type
116-117
Ratios of General Bonded Debt Outstanding
118
Direct and Overlapping Governmental Activities Debt
119
Legal Debt Margin Information
120-121
Pledged Revenue Coverage
122-123
Demographic and Economic Statistics
124
Principal Employers
125
Full -Time Equivalent City Government Employees by Function
126-127
Operating Indicators by Function
128-129
Capital Asset Statistics by Function
130-131
INTRODUCTORY SECTION
CITY OF GOLDEN VALLEY
HENNEPIN COUNTY, MINNESOTA
City Council and Other Officials
Year Ended December 31, 2016
CITY COUNCIL
Term Expires
Shep Harris
Mayor
12/31/2019
Joanie Clausen
Councilmember
12/31/2019
Larry Fonnest
Councilmember
12/31/2017
Steve Schmidgall
Councilmember
12/31/2019
Andy Snope
Councilmember
12/31/2017
CITY OFFICIALS
Timothy Cruikshank City Manager Appointed
Sue Virnig Finance Director Appointed
CITY CONSULTANTS
Best and Flanagan City Attorney Appointed
Springsted, Inc. Bond Consultants Appointed
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Organization Chart
Board of Zoning
Appeals
Environmental
Commission
Human Services
Fund
Planning
Commission
Citizens of
Golden Valley
City Council/
HRA
Civil Service
Commission
Human Rights
Commission
Open Space &
Recreation Commission
Teen Committee
City Manager
city of
goldvall�
Finance Park & Recreation Physical
Development Police Fire
Accounting Golf Maintenance Engineering
Recycling
Computer Services Golf Operations Inspections
Elections Recreation Planning
General Services Maintenance
MotorVehicle
Licensing Park Street Utilities Vehicle
Maintenance Maintenance Maintenance Maintenance
Building Forestry
Operations
bre
City- 0jr
go lden
va y
7800 Golden Valley Road
Golden Valley, MN 55427
June 2, 2017
Dear Honorable Mayor, City Council, City Manager, and Residents of Golden Valley:
I am pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Golden
Valley, Minnesota (the City) for the fiscal year ended December 31, 2016. 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, Kamowski, 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, 2016
are free of material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall financial statement
presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis
for rendering an unmodified opinion that the City's financial statements for the fiscal year ended
December 31, 2016, 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 CAFR is a requirement of state law. Also, the CAFR 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 CAFR 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.
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763-593-8000 763-593-8109 763-593-3968 www.goldenvalleymn.gov
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 21,571. 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 and commander. Fire
services are provided by 50 paid on-call firefighters, fire chief, deputy fire chief, education specialist, and
two firefighters that are code enforcement officers. The City has a Class 4 insurance rating.
The 2016-2017 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 and 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 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.
Beginning in 2012, the state of Minnesota changed the Market Value Homestead Credit (MVHC) to
Homestead Market Value Exclusion (HMVE). Instead of replacing a portion of the City's levy with a
state paid tax credit, a portion of homestead property market value is excluded from the tax base.
Although the City lost market value through this change, it is no longer subject to losing part of its levy
due to the state of Minnesota not paying its MVHC. The exclusion shifted the tax responsibility to higher
valued homes and commercial properties.
In 2016, a stable economy resulted in significantly higher building permit revenues than budgeted.
Although the total building permit revenue was less than 2015, it still showed an increase in building
permits primarily for improvements to multi -family residential properties, with a small increase in permits
for commercial properties.
Retirements, cost containment, and a dividend on insurance helped keep total overall expenditures under
budget in 2016.
The City will once again take a conservative approach for the 2017 budget year.
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The following table shows the City's building activity for the last 10 years:
The following major projects were started or completed throughout the City in 2016:
9000 Plymouth Avenue (General Mills) — Permits were issued to remodel the data center building
that started in the fall into 2017. Total construction value of 9000 Plymouth Avenue was $37,586,000.
9000 10th Avenue (Luther Company) — A permit was issued to remodel office space, storage, car
repair, and information technology center. Total construction value was $4,500,000.
2601 Noble Avenue North (Noble School) — A permit was issued for an addition to the school. Total
construction value was $1,190,000.
1753 Kelly Drive (Olson School) — A permit was issued for an addition to the school. Total
construction value was $1,425,000.
905 Hampshire Avenue South (Borton Volvo) — Complete demolition and reconstruction of car
showroom was done. Total construction value was $3,234,400.
2400 Sandburg Road (Sandburg School) — A permit was issued for an addition to the school. Total
construction value was $1,463,000.
316 Brookview Parkway (Brookview Community Center) — Permits were pulled for a new
community center with a banquet facility, children's play area, senior center, clubhouse, and grill that
started in the fall of 2016 and will continue into 2017. Total construction value was $12,200,200.
1985 Douglas Drive (Honeywell) — Permits were issued for a reroof, lab, and building remodel. Total
construction value was $651,421.
The Liberty (Formally Liberty Crossing) — Permits were pulled for the development of a 187 -unit
apartment and 4 of the 55 townhomes. Total construction value was $28,275,975.
701 Xenia (Xenia Apartments) — Permits were pulled for the foundation and parking ramp. Total
construction value was $1,340,000.
Single Family Homes (Various Addresses Around the City) — Permits were issued for 13 new
homes in 2016. Total construction value was $6,500,000.
9280 Golden Valley Road (Cornerstone Creek) — This development was approved in 2015 and will
be constructed in 2016. The apartment building will include 45 units. Total construction value is
$6,376,017.
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Total Permits
Year
Number
Value
2007
1,410
$
61,103,910
2008
3,556
$
67,452,357
2009
1,310
$
29,321,560
2010
1,109
$
28,800,511
2011
1,175
$
51,419,406
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
The following major projects were started or completed throughout the City in 2016:
9000 Plymouth Avenue (General Mills) — Permits were issued to remodel the data center building
that started in the fall into 2017. Total construction value of 9000 Plymouth Avenue was $37,586,000.
9000 10th Avenue (Luther Company) — A permit was issued to remodel office space, storage, car
repair, and information technology center. Total construction value was $4,500,000.
2601 Noble Avenue North (Noble School) — A permit was issued for an addition to the school. Total
construction value was $1,190,000.
1753 Kelly Drive (Olson School) — A permit was issued for an addition to the school. Total
construction value was $1,425,000.
905 Hampshire Avenue South (Borton Volvo) — Complete demolition and reconstruction of car
showroom was done. Total construction value was $3,234,400.
2400 Sandburg Road (Sandburg School) — A permit was issued for an addition to the school. Total
construction value was $1,463,000.
316 Brookview Parkway (Brookview Community Center) — Permits were pulled for a new
community center with a banquet facility, children's play area, senior center, clubhouse, and grill that
started in the fall of 2016 and will continue into 2017. Total construction value was $12,200,200.
1985 Douglas Drive (Honeywell) — Permits were issued for a reroof, lab, and building remodel. Total
construction value was $651,421.
The Liberty (Formally Liberty Crossing) — Permits were pulled for the development of a 187 -unit
apartment and 4 of the 55 townhomes. Total construction value was $28,275,975.
701 Xenia (Xenia Apartments) — Permits were pulled for the foundation and parking ramp. Total
construction value was $1,340,000.
Single Family Homes (Various Addresses Around the City) — Permits were issued for 13 new
homes in 2016. Total construction value was $6,500,000.
9280 Golden Valley Road (Cornerstone Creek) — This development was approved in 2015 and will
be constructed in 2016. The apartment building will include 45 units. Total construction value is
$6,376,017.
-v-
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.
Through its Pavement Management Program, in 1995 the City began reconstructing its streets that did not
meet standards. At the end of 2016, the City has completed 110.20 of 120.00 miles. The City plans to
construct 1.02 miles in 2017.
In 2015, the City Council decided to replace the Brookview Community Center with construction starting
in fall 2016. This decision came after a task force report and many resident input meetings.
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.
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. In 2016, the JWC finished completing an emergency well backup system.
The City is working with Hennepin County, the cities of Crystal and New Hope, the Bassett Creek
Watershed Management Organization, Metropolitan Council Environmental Services, and the state of
Minnesota to implement a plan to minimize flood damage to 39 properties in the vicinity of the DeCola
Ponds and Medicine Lake Road. This project includes multiple flood storage projects over a long
timeframe and also includes structural flood proofing of a number of homes. In 2016, the City, along with
the development of Liberty Crossing, made significant improvements to the DeCola Ponds location.
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I:_ .:._ 1 VENTI :T i"L .I�� UM -111 _ ►e�hMIM
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for
Excellence in Financial Reporting to the City for its CAFR for the fiscal year ended December 31, 2015.
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 CAFR 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 CAFR
continues to meet the Certificate of Achievement program requirements. We are submitting it to the
GFOA to determine its eligibility for another certificate.
The 2016 CAFR 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 and Wanita Williams have helped with the work needed to finish this report. Credit also must
be given to the mayor and City Council for support for maintaining the highest standards of
professionalism in the management of the City's finances.
Yours Truly,
Susan M. Virnig
Finance Director
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Golden Valley
Minnesota
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2015
Executive Director/CEO
-Vm-
FINANCIAL SECTION
MMKR
CERTIFIED PUBLIC
ACCOUNTANTS
INDEPENDENT AUDITOR'S REPORT
To the City Council and Management
City of Golden Valley, Minnesota
REPORT ON THE FINANCIAL STATEMENTS
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
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, 2016, and the related notes to the
financial statements, which collectively comprise the City's basic financial statements as listed in the
table of contents.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the City's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
(continued)
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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
OPINIONS
In our opinion, the financial statements referred to on the previous page present fairly, in all material
respects, the respective financial position of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City at December 31, 2016, 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.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and the required supplementary information (RSI), as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited procedures to
the RSI in accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do not express an
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City's basic financial statements. The introductory section, supplemental information, and
statistical section, as listed in the table of contents, are presented for purposes of additional analysis and
are not required parts of the basic financial statements.
The supplemental information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplemental
information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
(continued)
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OTHER REPORTING REQUIRED BY GOVERNMENTAUDITINGSTANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated June 2, 2017 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 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 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
June 2, 2017
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c•�.,, � � . j 10. rQ .
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CITY OF GOLDEN VALLEY
Management's Discussion and Analysis
Year Ended December 31, 2016
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, 2016. 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 2016 by $104,367,640 (net position). The City's
government -wide net position increased $2,095,504 in 2016. At year-end, the City reported
positive balances in all categories of net position, as was the case at the end of the previous year.
At the end of the fiscal year, the unassigned fund balance for the City's General Fund was
$8,954,274, which represents 49.3 percent of total General Fund expenditures and transfers out
for 2016.
The City sold five new bonds in 2016. The City's long-term bonded debt increased $14,895,000
in 2016, excluding unamortized premiums.
OVERVIEW OF THE FINANCIAL STATEMENTS
The management's discussion and analysis (MD&A) 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).
-4-
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, 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. However, unlike the
government -wide financial statements, 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 maintains 24 individual governmental funds. Information is presented separately in the basic
financial statements for the General, Street Reconstruction Debt Service, Brookview Community Center
Capital Project, Winnetka/Medicine Lake Tax increment Capital Project, Capital Improvement Capital
Project, and Douglas Drive Improvement Capital Project Funds, which are considered to be major funds.
Data from the other nonmajor governmental funds is combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor governmental funds is provided in the form of combining
statements elsewhere in this report. The City adopts an annual appropriated budget for the General Fund.
Budget -to -actual comparisons are 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 (utility), storm sewer, golf course, motor vehicle licensing, and recycling
enterprise operations, all of which are considered to be major funds of the City.
Internal service funds are an accounting device 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.
-5-
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.
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 pension plan is presented
following the notes to basic financial statements. Combining and individual fund statements and
schedules for nonmajor funds are presented 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 $104,367,640 at the end of the 2016 fiscal year, which represents an increase in
overall net position of 2,095,504 from the previous year.
Net Position — The City has 53.0 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 17.8 percent of the City's net position
represents resources that are subject to external restrictions on how they may be used. The remaining
29.2 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:
Current and other assets
Capital assets
Total assets
Deferred outflows of resources
Pension plan deferments
Noncurrent liabilities
(including current portion)
Other liabilities
Total liabilities
Deferred inflows of resources
Pension plan deferments
Net position
Net investment in capital assets
Restricted
Unrestricted
Total net position
Governmental Activities Business -Type Activities Total
2016 2015 2016 2015 2016 2015
$ 78,839,003 $ 67,381,010 $ 20,761,134 $ 14,821,926 $ 99,600,137 $ 82,202,936
79,395,088 76,527,503 34,431,580 31,011,294 113,826,668 107,538,797
158,234,091 143,908,513 55,192,714 45,833,220 213,426,805 189,741,733
13,326,183 1,853,217
— 13,326,183 1,853,217
109,484,786 82,992,931 2,621,745 910,000 112,106,531 83,902,931
4,337,990 3,148,048 3,199,545 811,307 7,537,535 3,959,355
113,822,776 86,140,979 5,821,290 1,721,307 119,644,066 87,862,286
2,741,282 1,460,528
2,741,282 1,460,528
23,527,470 24,816,606 31,809,835 30,101,294 55,337,305 54,917,900
18,567,757 17,942,353 — — 18,567,757 17,942,353
12,900,989 15,401,264 17,561,589 14,010,619 30,462,578 29,411,883
$ 54,996,216 $ 58,160,223 $ 49,371,424 $ 44,111,913 $104,367,640 $102,272,136
10
The following is a summary of the City's changes in net position for the last two fiscal years:
Revenues
Program revenues
Charges for services
Operating grants and
contributions
Capital grants and
contributions
General revenues
Property taxes
Franchise taxes
Other general revenues
Investment earnings
Gain on sale of capital assets
Total revenues
Expenses
General government
Public safety
Physical development
Parks and recreation
Interest and fiscal charges
Water and sewer
Storm sewer
Golf course
Motor vehicle licensing
Recycling
Total expenses
Change in net position
before transfers
Transfers - capital assets
Transfers - internal activities
Change in net position
Net position - beginning
Net position - ending
Governmental Activities Business -Type Activities Total
2016 2015 2016 2015 2016 2015
$ 3,269,379 $ 3,258,476 $ 13,998,846 $ 13,345,721 $ 17,268,225 $ 16,604,197
643,970 600,264 167,557 209,831 811,527 810,095
1,578,699 6,377,610 1,561,135 - 3,139,834 6,377,610
19,473,750
21,934,817
- - 19,473,750
21,934,817
402,017
1,028,368
700,000 - 1,102,017
1,028,368
347,543
372,590
- - 347,543
372,590
313,888
221,237
156,228 122,591 470,116
343,828
56,838
18,337
- - 56,838
18,337
26,086,084
33,811,699
16,583,766 13,678,143 42,669,850
47,489,842
4,182,777
11,327,689
-
-
4,182,777
11,327,689
8,213,351
6,907,661
-
-
8,213,351
6,907,661
11,274,790
13,448,443
-
-
11,274,790
13,448,443
1,736,619
1,486,218
-
-
1,736,619
1,486,218
2,172,554
2,066,076
-
-
2,172,554
2,066,076
-
-
8,327,113
9,867,731
8,327,113
9,867,731
-
-
1,685,494
1,795,260
1,685,494
1,795,260
-
-
2,172,621
1,848,745
2,172,621
1,848,745
-
-
401,363
349,019
401,363
349,019
-
-
407,664
392,239
407,664
392,239
27,580,091
35,236,087
12,994,255
14,252,994
40,574,346
49,489,081
(1,494,007) (1,424,388) 3,589,511 (574,851) 2,095,504 (1,999,239)
(1,000,000) - 1,000,000 -
(670,000) 100,000 670,000 (100,000)
(3,164,007) (1,324,388) 5,259,511 (674,851) 2,095,504 (1,999,239)
58,160,223 59,484,611 44,111,913 44,786,764 102,272,136 104,271,375
$ 54,996,216 $ 58,160,223 $ 49,371,424 $ 44,111,913 $104,367,640 $102,272,136
Governmental Activities - Governmental activities net position decreased by $3,164,007. Key elements
of this net decrease include:
• Capital grants and contributions decreased by $4,798,911 due to large capital contributions
received for the Douglas Drive Project in 2015.
• Revenue from property taxes decreased $2,461,067 from the prior year due to the City receiving
its share of excess tax increments related to the decertification of the Golden Hills Tax Increment
Financing (TIF) District in 2015.
• General government expenses decreased $7,144,912 due to the prior year payment of excess tax
increments to Hennepin County for the closure of the Golden Hills TIF District.
• Public safety expenses were $1,305,690 higher than last year, mainly due to increases in the
City's proportionate share of statewide pension plan liabilities.
• Physical development expenses decreased by $2,173,653 due to decreased street reconstruction.
• The City's governmental activities also transferred $1,670,000 to its business -type activities,
including $1,000,000 of storm sewer capital assets.
-7-
$12,000,000
$11,000,000
$10,000,000
$9,000,000
$ 8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
Expenses and Program Revenues — Governmental Activities
General Public Safety Physical Parks and Interest and
Government Development Recreation Fiscal Charges
■ Expenses ❑ Program Revenues
Revenue by Source — Governmental Activities
Taxes
76%
Charges for
Services Operating Grants
13% and Contributions
In
Other
3°./`a
grants and
ibutions
%
Business -Type Activities — Business -type activities net position increased by $5,259,511. Key elements
of this net increase include:
• Charges for services increased $653,125, mainly in water and sewer utility charges.
• Capital grants were $1,561,135 higher than last year, due to contributions received from other
governmental units to finance storm sewer system improvements. The Storm Sewer Utility Fund
also received $1,000,000 of capital assets transferred from the City's governmental activities.
• The City allocated $700,000 of franchise taxes to the Water and Sewer Utility Fund in 2016,
which were not allocated in 2015.
• Business -type activity expenses were $1,258,739 lower in 2016 than the previous year. This
decrease was mainly the result of being assessed $1.7 million by the Golden Valley — Crystal —
New Hope Joint Water Commission to finance an emergency repair to a 36 -inch water main in
the prior year.
In
$9,000,000
$ 8,000,000
$ 7,000,000
$6,000,000
$ 5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
Opera
and C
Expenses and Program Revenues — Business -Type Activities
Water and Storm Sewer Brookview Golf Motor Vehicle Recycling
Sewer Course
■ Expenses O Program Revenues
Revenue by Source — Business -Type Activities
Capital Grants. and
Cnntrihntwnnc other
Charges for
Senvices
85%
-10-
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 $66,318,597, an increase of $10,850,236 in comparison with the prior year. The
unassigned portion of fund balance is $7,931,121, which may be used for any approved public purpose.
The remainder of the fund balance is either: 1) not in spendable form ($18,822), 2) restricted by various
externally imposed constraints ($44,457,090), 3) internally committed for particular purposes ($208,846),
or 4) internally assigned for particular purposes ($13,702,718).
General Fund – The fund balance of the General Fund increased by $246,032 to $10,973,096 at
December 31, 2016.
General Fund operating results can be summarized as follows:
2016 2015
Fund balance beginning of year $ 10,727,064 $ 10,141,364
Additions
Revenue 18,397,103 17,562,914
Other sources 30,000 139,000
Total additions 18,427,103 17,701,914
Deductions
Expenditures 15,960,121 15,012,214
Other uses 2,220,950 2,104,000
Total deductions 18,181,071 17,116,214
Fund balance — end of year $ 10,973,096 $ 10,727,064
Of the total fund balance, $18,822 representing prepaid expenditures is classified as nonspendable.
The unassigned fund balance at December 31, 2016 of $8,954,274 is equal to 49.3 percent of total 2016
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.
-11-
General Fund Revenues — The following is an analysis of 2016 General Fund revenue:
Original Final Over (Under) Percent Over
Revenue Budget Budget Actual Final Budget (Under) Budget
Ad valorem taxes
$ 14,278,810
$ 14,278,810
$ 14,176,941
$ (101,869)
(0.7) %
Licenses
217,515
217,515
255,165
37,650
17.3
Permits
800,000
1,126,375
1,604,043
477,668
42.4
Intergovernmental
268,380
268,380
304,918
36,538
13.6
Charges for services
1,502,065
1,502,065
1,501,285
(780)
(0.1)
Fines and forfeits
320,425
320,425
283,483
(36,942)
(11.5)
Investment income
100,000
100,000
56,518
(43,482)
(43.5)
Other revenue
233,000
233,000
214,750
(18,250)
(7.8)
Totals $ 17,720,195 $ 18,046,570 $ 18,397,103 $ 350,533 1.9
Ad valorem taxes were under budget due to the City experiencing higher abatements and delinquencies
than allowed for in the budget. Licenses and permits were over budget due to an increase in building
construction. Investment income was under budget because of lower than anticipated market value
adjustments on the City's investment portfolio.
General Fund Expenditures — The following is an analysis of 2016 General Fund expenditures:
Original Final Over (Under) Percent Over
Expenditure Budget Budget Actual Final Budget (Under) Budget
General government $
1,271,220
$ 1,271,220
$ 1,222,766
$ (48,454)
(3.8) %
Administrative services
1,869,995
1,869,995
1,812,545
(57,450)
(3.1)
Casualty insurance
305,000
305,000
154,842
(150,158)
(49.2)
Public safety
6,961,390
6,961,390
6,503,055
(458,335)
(6.6)
Physical development
5,455,840
5,496,265
5,188,881
(307,384)
(5.6)
Parks and recreation
1,161,750
1,161,750
1,078,032
(83,718)
(7.2)
Totals $ 17,025,195 $ 17,065,620 $ 15,960,121 $ (1,105,499) (6.5)
General government expenditures were under budget due to savings in personal services and contracted
services. Casualty insurance was lower than budget due to a more favorable premium adjustment than
anticipated. Public safety expenditures were under budget due to personal service cost savings from
staffing changes. Physical development expenditures were under budget in personal service costs and
street maintenance. Parks and recreation costs were under budget due to variances in various program
expenditures.
-12-
Other Major Governmental Funds — The City reported five other major governmental funds for 2016.
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 $18,815,953 accumulated for future debt service. Fund balance decreased by $7,303,582 in
2016, mainly due to a crossover debt refunding paid from the proceeds of bonds issued in a prior year.
The Brookview Community Center Capital Project Fund is used to account for the construction of a new
community center. At year-end, this fund had a fund balance of $15,979,068, an increase of $14,985,214.
The City sold a $17,410,000 bond issue in 2016 to finance the project.
The Winnetka/Medicine Lake Tax Increment Capital Project Fund ended the year with a fund balance
deficit of $1,022,083. This fund paid $1,000,000 to purchase capital assets, financed through an interfund
loan, that were subsequently contributed to the Storm Sewer Enterprise Fund. The deficit is expected to
be financed through future tax increment collections.
The Capital Improvement Capital Project Fund, which is used to account for major street and street
lighting projects, ended the year with a fund balance of $4,162,388, a decrease of $126,929. The decrease
was due to capital outlay expenditures exceeding revenues for the year.
The Douglas Drive Improvement Capital Project Fund, used to account for a major street reconstruction
project, ended the year with a fund balance of $2,537,153, an increase of $2,578,441. The increase
resulted from the City selling a bond issue to finance this project in 2016, and only spending a portion of
the proceeds by year-end.
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 $51,607,784 at year-end, of which $19,797,949 was
unrestricted. The total net position of these funds improved by $5,692,287 during 2016.
Utility Fund net position increased $1,458,931, due to operating income of $747,122 and the allocation of
$700,000 of franchise taxes to this fund in 2016.
Storm Sewer Utility Fund net position increased $4,012,440, mainly due to the combination of $674,310
of operating income, and $2,561,135 of capital contributions received from other governmental units and
the Winnetka/Medicine Lake Tax Increment Capital Project Fund.
The Brookview Operating (Golf Course) Fund had an increase in net position of $91,066, as revenues
benefitted from favorable weather.
The Motor Vehicle Operating Fund had an increase in net position of $80,818, as operating revenue
increased 15.6 percent due to more transactions.
The Recycling Fund had an increase in net position of $49,032, mainly due to an increase in service
charges.
-13-
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, 2016 amounts to $113,826,668. This
balance represents a net increase of $6,287,871 from the prior year. The City's capital assets for the last
two years are as follows:
The majority of the increase in capital assets was in infrastructure and construction in progress due to
several significant street reconstruction projects, which also resulted in increased 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
$21,578,026 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 Enterprise Fund. The
following table presents the City's long-term liabilities as of the last two year -ends:
G.O. special assessment bonds
G.O. improvement bonds
HRA lease revenue bonds
G.O. certificates of indebtedness
G.O. tax abatement bonds
G.O. state -aid street bonds
Revenue bonds
Unamortized premiums
Compensated absences
Net pension liability — PERA
Net OPEB obligation
Total
Governmental Activities Business -Type Activities Total
2016 2015 2016 2015 2016 2015
$ 55,455,000
Governmental Activities
Business -Type
Activities
Total
—
2016
2015
2016
2015
2016
2015
Land
$ 3,527,685
$ 3,527,685
$ 857,044
$ 857,044
$ 4,384,729
$ 4,384,729
Land improvements
5,633,820
5,443,204
3,181,536
3,090,230
8,815,356
8,533,434
Buildings and improvements
13,848,345
12,946,453
667,657
667,657
14,516,002
13,614,110
Machinery and equipment
12,445,321
12,242,958
4,347,647
4,221,304
16,792,968
16,464,262
Infrastructure
115,651,073
111,632,158
41,546,632
40,475,677
157,197,705
152,107,835
Construction in progress
11,266,803
8,444,957
5,195,792
1,704,043
16,462,595
10,149,000
Less accumulated
depreciation
(82,977,959)
(77,709,912)
(21,364,728)
(20,004,661)
(104,342,687)
(97,714,573)
Net total
$ 79,395,088
$ 76,527,503
$ 34,431,580
$ 31,011,294
$113,826,668
$107,538,797
The majority of the increase in capital assets was in infrastructure and construction in progress due to
several significant street reconstruction projects, which also resulted in increased 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
$21,578,026 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 Enterprise Fund. The
following table presents the City's long-term liabilities as of the last two year -ends:
G.O. special assessment bonds
G.O. improvement bonds
HRA lease revenue bonds
G.O. certificates of indebtedness
G.O. tax abatement bonds
G.O. state -aid street bonds
Revenue bonds
Unamortized premiums
Compensated absences
Net pension liability — PERA
Net OPEB obligation
Total
Governmental Activities Business -Type Activities Total
2016 2015 2016 2015 2016 2015
$ 55,455,000
$ 64,860,000 $
5,630,000
—
17,410,000
—
2,350,000
2,295,000
1,015,000
1,360,000
1,640,000
1,760,000
2,043,531
1,200,577
1,575,785
1,508,910
21,506,136
9,293,069
859,334
715,375
2,580,000 910,000
41,745 —
$ 55,455,000
$ 64,860,000
5,630,000
—
17,410,000
—
2,350,000
2,295,000
1,015,000
1,360,000
1,640,000
1,760,000
2,580,000
910,000
2,085,276
1,200,577
1,575,785
1,508,910
21,506,136
9,293,069
859,334
715,375
$109,484,786 $ 82,992,931 $ 2,621,745 $ 910,000 $112,106,531 $ 83,902,931
-14-
In 2016, the City sold the following bond issues:
1) $1,290,000 G.O. Improvement Bonds, Series 2016A — The proceeds of this issue are being used
to finance various street improvement projects and will be repaid primarily from assessments to
the benefitting properties.
2) $800,000 G.O. Equipment Certificates of Indebtedness, Series 2016B — The proceeds of these
financed the purchases of various pieces of equipment included in the City's 2016-2020 Capital
Improvement Program, and will be repaid from approved tax levies.
3) $5,630,000 G.O. Street Reconstruction Bonds, Series 2016C — The proceeds of this issue are
being used to finance Douglas Drive Street Improvement Project, and will be repaid from
franchise taxes or approved tax levies.
4) $2,580,000 G.O. Storm Sewer Revenue Bonds, Series 2016D — The proceeds of this issue are
being used to finance the storm sewer improvements that coincide with the Liberty Crossing
Project, and will be repaid from Storm Sewer revenues and tax increment generated from the
project.
5) $17,410,000 Lease Revenue Bonds, Series 2016 — The proceeds of this issue, sold by the HRA
(blended component unit), are being used for the construction of the new Brookview Community
Center. These bonds will be repaid from annual rental payments from the City (parent
government) to the HRA.
In addition to regularly scheduled bond principal and interest payments, the City redeemed $6,945,000 of
its 2006B Improvement Bonds through a crossover refunding, and used available resources to exercise an
early call provision and redeem $775,000 of its 2006C Storm Sewer Revenue Bonds in 2016.
Additional details of long-term liabilities activity for the year can be found in Note 5 of the notes to basic
financial statements.
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 2017 budget:
The City's 2017 budgeted tax levy went up by 8.7 percent from 2016. The City strives for a
balanced budget with revenues equal expenditures.
The City will maintain fund balance for working capital in the General Fund to be at 60.0 percent
of the current year's adopted expenditures.
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.
-15-
GOVERNMENT -WIDE FINANCIAL STATEMENTS
CITY OF GOLDEN VALLEY
Statement of Net Position
December 31, 2016
Assets
Cash and temporary investments
Delinquent taxes receivable
Special assessments receivable (net of allowance)
Accounts and interest receivable
Due from other governmental units
Internal balances
Inventory
Prepaid items
Restricted assets - temporarily restricted
Cash and temporary investments
Interest receivable
Net pension asset - fire relief
Capital assets
Not depreciated
Depreciated, net of accumulated depreciation
Total assets
Deferred outflows of resources
Pension plan deferments - PERA
Pension plan deferments - fire relief
Total deferred outflows of resources
Total assets and deferred outflows of resources
Liabilities
Accounts and contracts payable
Accrued interest payable
Accrued salaries and employee benefits
Due to other governmental units
Deposits
Long-term liabilities
Due within one year
Due in more than one year
Total liabilities
Deferred inflows of resources
Pension plan deferments - PERA
Pension plan deferments - fire relief
Total deferred inflows of resources
Net position
Net investment in capital assets
Restricted for
Debt service
Redevelopment
Capital improvements
Fire relief pensions
Other purposes
Unrestricted
Total net position
Total liabilities, deferred inflows of resources, and net position
See notes to basic financial statements
-16-
Governmental
Business -Type
$ 1,469,014
Activities
Activities
Total
$ 44,054,430
$ 20,347,654
$ 64,402,084
143,643
-
143,643
2,812,437
352,339
3,164,776
516,811
1,678,772
2,195,583
144,104
888,947
1,033,051
2,841,297
(2,841,297)
-
103,410
39,243
142,653
18,822
295,476
314,298
26,451,302 - 26,451,302
51,031 - 51,031
1,701,716 - 1,701,716
14,794,488 6,052,836 20,847,324
64,600,600 28,378,744 92,979,344
158,234,091 55,192,714 213,426,805
12,915,314 - 12,915,314
410,869 - 410,869
13,326,183 - 13,326,183
$ 171,560,274 $ 55,192,714 $ 226,752,988
$ 881,093
$ 587,921
$ 1,469,014
935,980
13,090
949,070
331,213
-
331,213
143,532
278,154
421,686
2,046,172
2,320,380
4,366,552
9,863,366
-
9,863,366
99,621,420
2,621,745
102,243,165
113,822,776
5,821,290
119,644,066
2,550,048 - 2,550,048
191,234 - 191,234
2,741,282 - 2,741,282
23,527,470
31,809,835 55,337,305
12,948,940
- 12,948,940
312,778
- 312,778
3,210,471
- 3,210,471
1,921,351
- 1,921,351
174,217
- 174,217
12,900,989
17,561,589 30,462,578
54,996,216
49,371,424 104,367,640
$ 171,560,274 $ 55,192,714 $ 226,752,988
CITY OF GOLDEN VALLEY
Statement of Activities
Year Ended December 31, 2016
Functions/Programs Expenses
Governmental activities
General government
Public safety
Physical development
Parks and recreation
Interest and fiscal charges
Total governmental activities
Business -type activities
Water and sewer
Storm sewer
Golf course
Motor vehicle licensing
Recycling
Total business -type activities
Total governmental and
business -type activities
See notes to basic financial statements
$ 4,182,777
8,213,351
11,274,790
1,736,619
2,172,554
27,580,091
Proeram Revenues
8,327,113
Operating
Capital
Charges for
Grants and
Grants and
Services
Contributions
Contributions
$ 223,237
$ 67,314
$ —
2,155,832
576,656
—
400,351
—
1,578,699
489,959
$ 40,574,346
3,269,379
643,970
1,578,699
8,327,113
8,814,629
40,205 —
1,685,494
2,241,536
48,824 1,561,135
2,172,621
2,106,472
6,934 —
401,363
457,275
107 —
407,664
378,934
71,487 —
12,994,255
13,998,846
167,557 1,561,135
$ 40,574,346
$ 17,268,225 $
811,527 $ 3,139,834
-17-
General revenues
Property taxes
Franchise taxes
Other general revenues
Investment earnings
Gain on sale of capital assets
Transfers — capital assets
Transfers — internal activities
Total general revenues and transfers
Change in net position
Net position — beginning
Net position — ending
Net (Expenses)
Revenue and Changes in Net Position
Governmental Business -Type
Activities Activities Total
$ (3,892,226)
(5,480,863)
(9,295,740)
(1,246,660)
(2,172,554)
(22,088,043)
$ (3,892,226)
(5,480,863)
(9,295,740)
(1,246,660)
(2,172,554)
(22,088,043)
—
527,721
527,721
—
2,166,001
2,166,001
—
(59,215)
(59,215)
—
56,019
56,019
—
42,757
42,757
—
2,733,283
2,733,283
(22,088,043)
2,733,283
(19,354,760)
19,473,750
—
19,473,750
402,017
700,000
1,102,017
347,543
—
347,543
313,888
156,228
470,116
56,838
—
56,838
(1,000,000)
1,000,000
—
(670,000)
670,000
—
18,924,036
2,526,228
21,450,264
(3,164,007)
5,259,511
2,095,504
58,160,223
44,111,913
102,272,136
$ 54,996,216 $ 49,371,424 $ 104,367,640
-18-
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FUND FINANCIAL STATEMENTS
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF GOLDEN VALLEY
Balance Sheet
Governmental Funds
December 31, 2016
Liabilities
Accounts payable
$ 150,829 $
Street
Brookview
Contracts payable
—
Reconstruction
Community Center
Accrued salaries payable
General
Debt Service
Capital Project
Due to other governmental units
89,082
Assets
32,774
Deposits
762,024
Cash and temporary investments
$ 11,963,889
$ 8,394,610
$ —
Cash held with trustee
—
10,374,412
16,076,890
Receivables
—
Total liabilities
1,333,148
Delinquent taxes
143,643
—
—
Special assessments
11,228
2,732,337
—
Accounts
41,123
—
22,000
Accrued interest
167,274
51,031
—
Due from other funds
28,102
—
—
Advances to other funds
—
—
—
Due from other governmental units
87,034
—
—
Prepaid items
18,822
—
—
Total assets
$ 12,461,115
$ 21,552,390
$ 16,098,890
Liabilities
Accounts payable
$ 150,829 $
3,000 $
54,574
Contracts payable
—
—
32,474
Accrued salaries payable
331,213
—
—
Due to other governmental units
89,082
—
32,774
Deposits
762,024
1,100
—
Due to other funds
—
—
—
Advances from other funds
—
—
—
Total liabilities
1,333,148
4,100
119,822
Deferred inflows of resources
Unavailable revenue — property taxes
143,643
—
—
Unavailable revenue — special assessments
11,228
2,732,337
—
Total deferred inflows of resources
154,871
2,732,337
—
Fund balances (deficits)
Nonspendable 18,822 — —
Restricted — 18,815,953 14,891,083
Committed — — —
Assigned 2,000,000 — 1,087,985
Unassigned 8,954,274 — —
Total fund balances (deficits) 10,973,096 18,815,953 15,979,068
Total liabilities, deferred inflows of
resources, and fund balances $ 12,461,115 $ 21,552,390 $ 16,098,890
See notes to basic financial statements
-19-
Winnetka/
Medicine Lake
Capital
Douglas Drive
Tax Increment
Improvement
Improvement
Capital Project
Capital Project
Capital Project
Nonmajor
Totals
$ 19,769
$ 3,534,115
$ 2,341,158
$
15,654,437
$
41,907,978
-
-
-
-
26,451,302
-
-
-
-
143,643
-
586
-
68,286
2,812,437
-
-
277,083
1,275
341,481
-
-
-
-
218,305
187,020
-
-
215,122
-
1,440,000
-
-
1,440,000
-
3,500
-
53,570
144,104
-
-
-
-
18,822
$ 19,769
$ 5,165,221
$ 2,618,241
$
15,777,568
$
73,693,194
$ -
$ 20,455
$ 81,088
$
56,230
$
366,176
-
-
-
459,536
492,010
-
-
-
-
331,213
-
-
-
21,676
143,532
-
981,792
-
290,485
2,035,401
41,852
-
-
8,333
50,185
1,000,000
-
-
-
1,000,000
1,041,852
1,002,247
81,088
836,260
4,418,517
-
-
-
-
143,643
-
586
-
68,286
2,812,437
-
586
-
68,286
2,956,080
-
-
-
-
18,822
-
-
2,532,277
8,217,777
44,457,090
-
-
-
208,846
208,846
-
4,162,388
4,876
6,447,469
13,702,718
(1,022,083)
-
-
(1,070)
7,931,121
(1,022,083)
4,162,388
2,537,153
14,873,022
66,318,597
$ 19,769
$ 5,165,221
$ 2,618,241
$
15,777,568
$
73,693,194
-20-
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CITY OF GOLDEN VALLEY
Reconciliation of the Balance Sheet to the
Statement of Net Position
Governmental Funds
December 31, 2016
Total fund balances — governmental funds $ 66,318,597
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not
reported as assets in governmental funds.
Cost of capital assets 162,238,203
Less accumulated depreciation (82,882,272)
Long-term liabilities, including bonds 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 (83,500,000)
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. 2,956,080
Accrued interest payable is included in net position, but is excluded from fund balances until due
and payable. (935,980)
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 (9,391,241)
Add internal service balances allocated to business -type activities 2,236,360
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. (2,043,531)
Total net position — governmental activities $ 54,996,216
See notes to basic financial statements
-21-
CITY OF GOLDEN VALLEY
Statement of Revenue, Expenditures, and Changes in Fund Balances
Governmental Funds
Year Ended December 31, 2016
General
Street
Reconstruction
Debt Service
Brookview
Community Center
Capital Project
Revenue
Ad valorem taxes
$ 14,176,941
$ 4,326,955
$ —
Tax increments
—
—
—
Special assessments
10,496
667,606
—
Franchise taxes
—
—
—
Licenses and permits
1,859,208
—
—
Intergovernmental revenue
304,918
—
—
Charges for services
1,501,285
—
—
Fines and forfeits
283,483
—
—
Investment income
56,518
144,201
2,669
Other revenue
204,254
—
91,462
Total revenue
18,397,103
5,138,762
94,131
Expenditures
Current
General government
1,222,766
—
—
Administrative services
1,812,545
—
—
Casualty insurance
154,842
—
—
Public safety
6,503,055
—
—
Physical development
5,188,881
—
—
Parks and recreation
1,078,032
—
—
Capital outlay
—
—
2,308,917
Debt service
Principal
—
3,750,000
—
Interest and fiscal charges
—
1,855,434
—
Total expenditures
15,960,121
5,605,434
2,308,917
Excess (deficiency) of revenue over expenditures
2,436,982
(466,672)
(2,214,786)
Other financing sources (uses)
Sale of capital assets
—
—
—
Bonds issued
—
75,000
17,410,000
Paid to refunded bond escrow agent
—
(6,945,000)
—
Premiums on bonds issued
—
33,090
590,000
Transfers in
30,000
—
—
Transfers (out)
(2,220,950)
—
(800,000)
Total other financing sources (uses)
(2,190,950)
(6,836,910)
17,200,000
Net change in fund balances
246,032
(7,303,582)
14,985,214
Fund balances (deficits)
Beginning of year
10,727,064
26,119,535
993,854
End of year
$ 10,973,096
$ 18,815,953
$ 15,979,068
See notes to basic financial statements
-22-
Winnetka/
Medicine Lake Capital Douglas Drive
Tax Increment Improvement Improvement
Capital Project Capital Project Capital Project Nonmajor
Totals
$ — S 2,220
$ — $
1,033,400
$ 19,539,516
— —
—
24,727
24,727
— —
—
128,789
806,891
— —
402,017
—
402,017
— —
—
—
1,859,208
— —
674,887
575,159
1,554,964
— 43,613
—
—
1,544,898
— —
—
—
283,483
— 20,072
4,876
73,894
302,230
— 46,020
—
386,168
727,904
— 111,925
1,081,780
2,222,137
27,045,838
—
—
—
77,105
1,299,871
—
—
—
—
1,812,545
—
—
—
—
154,842
—
—
—
60,009
6,563,064
—
—
—
—
5,188,881
—
—
—
—
1,078,032
1,000,000
238,854
3,842,339
4,064,453
11,454,563
—
—
—
1,210,000
4,960,000
22,083
—
—
428,156
2,305,673
1,022,083
238,854
3,842,339
5,839,723
34,817,471
(1,022,083)
(126,929)
(2,760,559)
(3,617,586)
(7,771,633)
—
—
—
80,627
80,627
—
—
5,500,000
2,145,000
25,130,000
—
—
—
—
(6,945,000)
—
—
—
403,152
1,026,242
—
—
—
2,521,950
2,551,950
—
—
(161,000)
(40,000)
(3,221,950)
—
—
5,339,000
5,110,729
18,621,869
(1,022,083)
(126,929)
2,578,441
1,493,143
10,850,236
—
4,289,317
(41,288)
13,379,879
55,468,361
$ (1,022,083) $
4,162,388
$ 2,537,153
$ 14,873,022
$ 66,318,597
-23-
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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, 2016
Total net change in fund balances — governmental funds $ 10,850,236
Amounts reported for governmental activities in the Statement of Activities are different because:
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 10,192,081
Depreciation expense (6,287,138)
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.
Capital assets transferred to proprietary funds (1,000,000)
Net book value of capital asset disposals (23,789)
The amount of bond proceeds used to finance the acquisition of capital assets is reported in the
governmental funds as a source of financing. Bond proceeds are not revenues in the Statement of
Activities, but rather constitute long-term liabilities. (25,130,000)
Repayment of long-term liabilities is an expenditure in the governmental funds, but the repayment
reduces long-term liabilities in the Statement of Net Position. 11,905,000
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. (50,169)
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. (842,954)
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. (776,116)
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 (2,433,934)
Add back internal service fund activity allocated to business -type activities 432,776
Change in net position — governmental activities $ (3,164,007)
See notes to basic financial statements
-24-
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CITY OF GOLDEN VALLEY
Statement of Revenue, Expenditures, and Changes in Fund Balances
General Fund — Budget and Actual
Year Ended December 31, 2016
Fund balances
Beginning of year
End of year
See notes to basic financial statements
-25-
10,727,064
$ 10,973,096
Original
Final
Over (Under)
Budget
Budget
Actual
Final Budget
Revenue
Ad valorem taxes
$ 14,278,810
$ 14,278,810
$ 14,176,941
$ (101,869)
Special assessments
10,000
10,000
10,496
496
Licenses and permits
1,017,515
1,343,890
1,859,208
515,318
Intergovernmental revenue
268,380
268,380
304,918
36,538
Charges for services
1,502,065
1,502,065
1,501,285
(780)
Fines and forfeits
320,425
320,425
283,483
(36,942)
Investment income
100,000
100,000
56,518
(43,482)
Other revenue
223,000
223,000
204,254
(18,746)
Total revenue
17,720,195
18,046,570
18,397,103
350,533
Expenditures
Current
General government
1,271,220
1,271,220
1,222,766
(48,454)
Administrative services
1,869,995
1,869,995
1,812,545
(57,450)
Casualty insurance
305,000
305,000
154,842
(150,158)
Public safety
6,961,390
6,961,390
6,503,055
(458,335)
Physical development
5,455,840
5,496,265
5,188,881
(307,384)
Parks and recreation
1,161,750
1,161,750
1,078,032
(83,718)
Total expenditures
17,025,195
17,065,620
15,960,121
(1,105,499)
Excess of revenue over expenditures
695,000
980,950
2,436,982
1,456,032
Other financing sources (uses)
Transfers in
30,000
30,000
30,000
—
Transfers (out)
(725,000)
(1,220,950)
(2,220,950)
(1,000,000)
Total other financing sources (uses)
(695,000)
(1,190,950)
(2,190,950)
(1,000,000)
Net change in fund balances
$ —
$ (210,000)
246,032
$ 456,032
Fund balances
Beginning of year
End of year
See notes to basic financial statements
-25-
10,727,064
$ 10,973,096
Assets
Current assets
Cash and temporary investments
Receivables
Special assessments
Accounts
Allowance for uncollectibles
Due from other governmental units
Due from other funds
Inventory
Prepaid items
Total current assets
Noncurrent assets
Advances to other funds
Net pension asset — fire relief
Capital assets
Land
Land improvements
Buildings and improvements
Machinery and equipment
Infrastructure — distribution and
collection systems
Construction in progress
Total capital assets
Less accumulated depreciation
Capital assets, net
Total noncurrent assets
Total assets
Deferred outflows of resources
Pension plan deferments — PERA
Pension plan deferments — fire relief
Total deferred outflows
of resources
Total assets and deferred
outflows of resources
See notes to basic financial statements
CITY OF GOLDEN VALLEY
Statement of Net Position
Proprietary Funds
December 31, 2016
Business -Type Activities — Enterprise Funds
Storm Sewer Brookview Motor Vehicle
Utility Utility Operating Operating
$ 8,124,335
$ 9,242,291
391,545
—
1,678,751
—
(39,206)
—
925
885,729
—
200,046
22,781
—
163,781
131,270
10,342,912
10,459,336
2,204,000
$ 1,185,402 $ 660,908
21 —
374
16,462 —
—
—
857,044
—
30,054
—
3,151,482
—
505,490
—
162,167
—
2,154,430
773,021
1,405,930
14,266
22,654,628
18,892,004
262,882
4,932,910
25,607,484
24,597,935
5,576,623
14,266
(11,416,989)
(5,962,112)
(3,972,775)
(12,852)
14,190,495
18,635,823
1,603,848
1,414
14,190,495
20,839,823
1,603,848
1,414
24,533,407
31,299,159
2,806,532
662,322
$ 24,533,407 $ 31,299,159 $ 2,806,532 $ 662,322
-26-
Recycling
Governmental
Totals Internal Service
$ 1,134,718 $ 20,347,654 $ 2,146,452
— 391,545 —
1,678,772 8,056
— (39,206) —
1,919 888,947 -
- 200,046 —
39,243 103,410
— 295,476 —
1,136,637 23,802,477 2,257,918
2,204,000 —
1,701,716
— 857,044
-
- 3,181,536
-
- 667,657
-
- 4,347,647
134,844
— 41,546,632
-
- 5,195,792
-
- 55,796,308
134,844
— (21,364,728)
(95,687)
— 34,431,580
39,157
— 36,635,580
1,740,873
1,136,637 60,438,057
3,998,791
12,915,314
410,869
13,326,183
$ 1,136,637 $ 60,438,057 $ 17,324,974
-27-
(continued)
Liabilities
Current liabilities
Accounts payable
Accrued interest payable
Contracts payable
Accrued compensated absences —
current
Due to other governmental units
Due to other funds
Deposits
Total current liabilities
Noncurrent liabilities
Advances from other funds
Accrued compensated absences
Net pension liability — PERA
Net OPEB obligation
Bonds payable — long-term
Total noncurrent liabilities
Total liabilities
Deferred inflows of resources
Pension plan deferments — PERA
Pension plan deferments — fire relief
Total deferred outflows
of resources
Net position
Net investment in capital assets
Restricted for fire relief pensions
Unrestricted
Total net position
Total liabilities, deferred inflows
of resources, and net position
See notes to basic financial statements
CITY OF GOLDEN VALLEY
Statement of Net Position (continued)
Proprietary Funds
December 31, 2016
Business -Type Activities — Enterprise Funds
Storm Sewer Brookview Motor Vehicle
Utility Utility Operating Operating
$ 20,033
$ 53,138 $
66,387
—
13,090
—
116,844
312,164
21,080,215
218,210
29,436
1,072
364,983
—
89,122
2,230,290
968
809,192
2,638,118
68,427
2,644,000
— 2,621,745 —
2,644,000 2,621,745 —
3,453,192 5,259,863 68,427
$ 390
390
390
14,190,495
16,014,078
1,603,848
1,414
6,889,720
10,025,218
1,134,257
660,518
21,080,215
26,039,296
2,738,105
661,932
$ 24,533,407 $ 31,299,159 $ 2,806,532 $ 662,322
Total net position — enterprise funds
Adjustment to reflect the consolidation of internal service fiord
activity related to enterprise funds
Net position — business -type activities
-28-
Governmental
Activities
Recycling Totals Internal Service
$ 18,965 $ 158,913 $ 22,907
— 13,090 —
429,008 —
1,073,366
29,436 278,154 -
- 364,983 -
- 2,320,380 10,771
48,401 3,564,528 1,107,044
— 2,644,000
—
502,419
21,506,136
859,334
— 2,621,745
-
- 5,265,745
22,867,889
48,401 8,830,273
23,974,933
— —
2,550,048
191,234
2,741,282
31,809,835 39,157
1,921,351
1,088,236 19,797,949 (11,351,749)
1,088,236 51,607,784 (9,391,241)
$ 1,136,637 $ 60,438,057 $ 17,324,974
$ 51,607,784
(2,236,360)
$ 49,371,424
-29-
CITY OF GOLDEN VALLEY
Statement of Revenue, Expenses, and Changes in Net Position
Proprietary Funds
Year Ended December 31, 2016
Business -Type Activities - Enterprise Funds
Storm Sewer Brookview Motor Vehicle
Utility Utility Operating Operating
Operating revenue
Charges for services $ 8,781,856 $ 2,241,536 $ 1,280,961 $ 457,275
Sales and rentals 32,773 - 873,680 -
Less sales tax and credit card fees - - (48,169) -
Total operating revenue 8,814,629 2,241,536 2,106,472 457,275
Operating expenses
Enterprise operations
7,277,523
870,351
1,939,476
346,583
Other services
-
-
-
-
Depreciation
789,984
696,875
98,095
2,860
Total operating expenses
8,067,507
1,567,226
2,037,571
349,443
Operating income (loss)
747,122
674,310
68,901
107,832
Nonoperating revenue (expense)
Franchise taxes
700,000
-
-
-
Intergovernmental revenue
40,205
48,824
876
-
Investment income
43,227
96,963
6,884
2,879
Other income
-
-
6,058
107
Gain on sale of capital assets
13,900
18,750
8,347
-
Interest expense
(85,523)
(87,542)
Total nonoperating revenue (expense)
711,809
76,995
22,165
2,986
Income (loss) before capital
contributions and transfers
1,458,931
751,305
91,066
110,818
Capital contributions
-
2,561,135
-
-
Transfers in
-
700,000
-
-
Transfers (out)
-
-
-
(30,000)
Change in net position
1,458,931
4,012,440
91,066
80,818
Net position
Beginning of year
19,621,284
22,026,856
2,647,039
581,114
End of year
$ 21,080,215
$ 26,039,296
$ 2,738,105 $
661,932
See notes to basic financial statements
-30-
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
Governmental
Activities
Recycling Totals Internal Service
$ 378,934 $ 13,140,562 $ 7,645,757
- 906,453 -
(48,169) -
378,934 13,998,846 7,645,757
407,664
10,841,597
-
10,554,125
-
1,587,814
13,569
407,664
12,429,411
10,567,694
(28,730)
1,569,435
(2,921,937)
-
700,000
-
61,842
151,747
476,315
6,275
156,228
11,658
9,645
15,810
30
-
40,997
-
-
(173,065)
-
77,762
891,717
488,003
49,032 2,461,152 (2,433,934)
- 2,561,135 -
700,000
- (30,000) -
49,032 5,692,287 (2,433,934)
1,039,204 45,915,497 (6,957,307)
$ 1,088,236 $ 51,607,784 $ (9,391,241)
$ 5,692,287
(432,776)
$ 5,259,511
-31-
CITY OF GOLDEN VALLEY
Statement of Cash Flows
Proprietary Funds
Year Ended December 31, 2016
Cash flows from operating activities
Receipts from customers and users
Receipts from interfund services provided
Paid to suppliers/service providers
Paid to employees
Payments for interfund services
Net cash flows from operating activities
Cash flows from capital and related financing activities
Acquisition of capital assets
Capital grants
Proceeds from issuance of revenue bonds
Repayment of advances
Interest (paid) received on advances
Transfers in
Proceeds from sale of capital assets
Principal paid on capital debt
Interest paid on capital debt
Net cash flows from capital and
related financing activities
Cash flows from investing activities
Interest received on investments
Cash flows from noncapital financing activities
Operating grants
Franchise taxes
Advances to other funds
Transfers (out)
Net cash flows from noncapital
financing activities
Net increase in cash and temporary
investments/cash equivalents
Cash and temporary investments/cash equivalents
Beginning of year
End of year
40,205 48,824 876 —
700,000 — — -
- (1,000,000) — —
(30,000)
740,205 (951,176) 876 (30,000)
1,692,731 2,192,501 36,286 83,639
6,431,604 7,049,790 1,149,116 577,269
$ 8,124,335 $ 9,242,291 $ 1,185,402 $ 660,908
See notes to basic financial statements
-32-
Business -Type
Activities —
Enterprise Funds
Storm Sewer
Brookview
Motor Vehicle
Utility
Utility
Operating
Operating
$ 8,749,390
$ 1,363,172 $
2,160,222
$ 457,382
(5,610,474)
1,614,805
(733,697)
(29,526)
(1,160,889)
(302,352)
(1,162,931)
(287,096)
(275,000)
(200,000)
(85,000)
(30,000)
1,703,027
2,475,625
178,594
110,760
(368,580)
(3,481,105)
(158,415)
-
-
1,561,135
—
-
-
2,621,745
(352,000)
172,000
(87,048)
18,166
—
700,000
—
—
13,900
18,750
8,347
-
-
(910,000)
—
-
-
(90,099)
—
—
(793,728)
610,592
(150,068)
—
43,227
57,460
6,884
2,879
40,205 48,824 876 —
700,000 — — -
- (1,000,000) — —
(30,000)
740,205 (951,176) 876 (30,000)
1,692,731 2,192,501 36,286 83,639
6,431,604 7,049,790 1,149,116 577,269
$ 8,124,335 $ 9,242,291 $ 1,185,402 $ 660,908
See notes to basic financial statements
-32-
Governmental
Activities
Recycling Totals Internal Service
$ 388,718 $ 13,118,884 $ 5,476,208
— — 2,167,006
(341,138) (5,100,030) (5,624,204)
— (2,913,268) (2,341,851)
(51,500) (641,500) —
(3,920) 4,464,086 (322,841)
(4,008,100)
1,561,135
2,621,745
(180,000)
(68,882)
700,000
40,997
(910,000)
(90,099)
— (333,204) —
6,275 116,725 11,658
61,842 151,747 476,315
— 700,000 -
- (1,000,000) -
- (30,000) —
61,842 (178,253) 476,315
64,197 4,069,354 165,132
1,070,521 16,278,300 1,981,320
$ 1,134,718 $ 20,347,654 $ 2,146,452
-33-
(continued)
CITY OF GOLDEN VALLEY
Statement of Cash Flows (continued)
Proprietary Funds
Year Ended December 31, 2016
Schedule of noncash capital and related
financing activities
Contributions of capital assets $ — $ 1,000,000 $ — $ —
See notes to basic financial statements
-34-
Business -Type
Activities —
Enterprise Funds
Storm Sewer
Brookview
Motor Vehicle
Utility
Utility
Operating
Operating
Reconciliation of operating income (loss) to net
cash flows from operating activities
Operating income (loss)
$ 747,122
$ 674,310
$ 68,901
$ 107,832
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities
Depreciation
789,984
696,875
98,095
2,860
Other income
6,058
107
Changes in assets, liabilities, and deferred
outflows/inflows
Special assessments receivable
32,622
—
—
—
Accounts receivable
(96,936)
568
86
—
Due from other governmental units
(925)
(878,932)
Inventory
(18,707)
—
(563)
—
Prepaid items
(6,232)
(131,270)
383
Net pension asset — fire relief
—
—
—
—
Deferred outflows — pension plan deferments
—
—
—
—
Accounts payable
10,954
(47,078)
1,889
(39)
Contracts payable
93,704
173,070
6,172
—
Due to other governmental units
142,358
17,957
(2,427)
—
Deposits
9,083
1,970,125
Accrued compensated absences
—
—
—
—
Net pension liability — PERA
—
—
—
—
Net OPEB obligation
—
—
—
—
Deferred inflows — pension plan deferments
—
—
—
—
Net cash flows from operating activities
$ 1,703,027
$ 2,475,625
$ 178,594
$ 110,760
Schedule of noncash capital and related
financing activities
Contributions of capital assets $ — $ 1,000,000 $ — $ —
See notes to basic financial statements
-34-
Governmental
A
Recycling Totals Internal Service
$ (28,730) $ 1,569,435 $ (2,921,937)
— 1,587,814 13,569
9,645 15,810 30
32,622
— (96,282)
(2,573)
139 (879,718)
-
- (19,270)
13,949
— (137,119)
122,801
204,213
(11,472,966)
(2,979) (37,253)
9,936
— 272,946
—
18,005 175,893
-
- 1,979,208
5,482
66,875
12,213,067
143,959
1,280,754
$ (3,920) $ 4,464,086 $ (322,841)
$ — $ 1,000,000 $ —
-35-
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF GOLDEN VALLEY
Notes to Basic Financial Statements
December 31, 2016
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 Minnesota 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.
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 2016
fiscal year, the City paid LOGIS $521,818 for services provided.
-36-
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 of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. 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 collected
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.
-37-
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 services, 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.
Brookview Community Center Capital Project Fund — This fund is used to account for the
construction of the City's new Brookview Community Center.
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.
Capital Improvement Capital Project 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 Capital Project Fund — This fund used to account for street
improvements related to Douglas Drive.
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.
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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 need 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 are held by trustees for future bond refunding or capital projects. Earnings on these
accounts are allocated directly to the respective funds. The investments and accrued interest related to
these accounts are reported as restricted assets in the government -wide financial statements.
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. The Minnesota Municipal Money Market (4M) Fund
is an external investment pool regulated by Minnesota Statutes that is not registered with the Securities
and Exchange Commission (SEC), but follows the same regulatory rules of the SEC. The City's
investment in this fund is measured 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.
-39-
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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 December 31, 2016 consist of the following:
Special assessments receivable
Delinquent
Deferred
Total
Allowance for uncollectible
Governmental Funds
Enterprise
Funds
Street Capital
Reconstruction Improvement
General Debt Service Capital Project Nonmajor Utility
$ 3,592 $ 15,633 $
7,636 2,716,704
11,228 2,732,337
586
586
$ 9,524 $ 39,206
58,762 352,339
68,286 391,545
(39,206)
Net of allowance $ 11,228 $ 2,732,337 $ 586 $ 68,286 $ 352,339
.M
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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."
K. 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. Enterprise fund inventories consist of merchandise held for
resale at the Brookview Municipal Golf Course and supplies in the Utility Fund. Inventory in the internal
service funds consists of parts, supplies, and gasoline for the maintenance of city -owned vehicles.
L. Prepaid Items
Certain payments to vendors that reflect costs applicable to future periods are reported as prepaid items.
In the governmental funds, prepaid items are reported using the consumption method.
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. Interest incurred during the construction phase of
capital assets for business -type activities is included as part of the capitalized value of the assets
constructed. 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, Statements of Financial Position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element, deferred outflows of resources,
represents a consumption of net position that applies to future periods and so will not be recognized as an
outflow of resources (expense/expenditure) until then. The City only has one item that qualifies for
reporting in this category, deferred outflows of resources related to pensions reported in the
government -wide and proprietary fund Statements of Net Position. This deferred outflow results from
differences between expected and actual experience, changes of assumptions, difference between
projected and actual earnings on pension plan investments, and from 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 standards.
-41-
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In addition to liabilities, statements of financial position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element represents an acquisition of net
position that applies to future periods and so will not be recognized as an inflow of resources (revenue)
until that time. The City has two types of items which qualify for reporting in this category.
The first item, unavailable revenue, arises only under a modified accrual basis of accounting and,
therefore, is only reported in the governmental funds Balance Sheet. The governmental funds report
unavailable revenue from two sources: property taxes and special assessments. These amounts are
deferred and recognized as an inflow of resources in the period that the amounts become available.
The second item, deferred inflows related to pensions, is reported in the government -wide and proprietary
fund Statements of Net Position. This deferred inflow results from differences between expected and
actual experience, changes of assumptions, and difference between projected and actual earnings on
pension plan investments. These amounts are deferred and amortized as required under pension standards.
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. Pensions
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 except that the PERA's fiscal year end is June 30. For this
purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and
refunds are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
The PERA has a special funding situation created by a direct aid contribution made by the state of
Minnesota. The direct aid is a result of the merger of the Minneapolis Employees Retirement Fund into
the PERA on January 1, 2015.
-42-
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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 current year budgeted General Fund expenditures.
-43-
NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
NOTE 2 — CASH AND INVESTMENTS
A. Components of Cash and Investments
Cash and investments at year-end consist of the following:
Deposits
$ 3,245,842
Investments
87,603,179
Cash on hand
4,365
Total
$ 90,853,386
Cash and investments are presented in the financial statements as follows:
Government -Wide Statement of Net Position
Cash and temporary investments $ 64,402,084
Restricted assets — cash and temporary investments 26,451,302
Total $ 90,853,386
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.
-44-
NOTE 2 — CASH AND INVESTMENTS (CONTINUED)
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 carrying amount of the City's deposits was $3,245,842 while the balance on the bank
records was $5,055,424. At December 31, 2016, all deposits were fully covered by federal depository
insurance or collateral held by the City's agent in the City's name.
C. Investments
Investments are subject to various risks, the following of which are considered the most significant:
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.
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.
-45-
NOTE 2 — CASH AND INVESTMENTS (CONTINUED)
The City has the following investments at year-end:
Investment Type
Fair Value Interest Risk— Concentration
Credit Risk Measurements Maturity Duration in Years Risk
Rating Agency Using No Maturity Less Than 1 1 to 5 Total > 5 Percent
U.S. government guaranteed agencies
Not Rated Level 1 $ —
$ 1,566,474 $
— $ 1,566,474
N/A
U.S. agency debt securities
Federal Home Loan Bank
AA S&P Level 1 —
—
3,854,985 3,854,985
No
Federal Home Loan Mortgage Corporation
AA S&P Level 1 —
1,887,581 13,416,620
15,304,201
Yes
Federal National Mortgage Association
AA S&P Level 1 —
3,779,776
1,092,905 4,872,681
Yes
Federal Farm Credit Bank
AA S&P Level 1 —
—
2,983,320 2,983,320
No
Local government debt securities
AAA S&P Level 1 —
752,438
— 752,438
No
Local government debt securities
AA S&P Level 1 —
2,561,600
4,183,900 6,745,500
No
Local government debt securities
AA Moody Level 1 —
592,154
1,466,870 2,059,024
No
Local government debt securities
A S&P Level 1 —
1,276,312
— 1,276,312
No
Local government debt securities
A Moody Level 1 —
—
2,385,703 2,385,703
No
Local government debt securities
Baa Moody Level 1 —
1,001,540
— 1,001,540
No
Negotiable certificates of deposit
Not Rated Level 1 —
2,735,206
2,471,762 5,206,968
No
Investment pool/mutual funds
4M Fund
Not Rated Not Applicable 22,949,674
—
— 22,949,674
No
First American Government Obligation
AAA S&P NAV 16,644,359
16,644,359
No
Total investments
$39,594,033
$16,153,081 $31,856,065 $87,603,179
NAV — This fund is reported at net asset value,
has no unfunded commitments, and may be redeemed daily without prior redemption notice.
NOTE 3 — INTERFUND BALANCES
AND TRANSFERS
A. Interfund Balances
The City had the following interf ind balances at year-end:
Receivable Fund
Payable Fund
Amount
Reason
Due from/to other funds
General
Winnetka/Medicine Lake
Tax Increment Capital Project
$ 19,769
Short-term cash flow
General
Nonmajor governmental
8,333
Short-term cash flow
Storm Sewer Utility
Utility Enterprise
177,963
Current portion of advance (1)
Capital Improvement Capital Project
Utility Enterprise
187,020
Current portion of advance (2)
Storm Sewer Utility
Winnetka/Medicine Lake
Tax Increment Capital Project
22,083
Current portion of advance (3)
415,168
Advances to/from other funds
Storm Sewer Utility
Utility Enterprise
1,204,000
Advance (1)
Capital Improvement Capital Project
Utility Enterprise
1,440,000
Advance (2)
Storm Sewer Utility
Winnetka/Medicine Lake
Tax Increment Capital Project
1,000,000
Advance (3)
3,644,000
Total interfund balances reported on fund financial statements
4,059,168
Interfund activity eliminated from government -wide financial statements
(3,454,231)
Internal service fund activities related
to business -type activities
2,236,360
Internal balances reported on government -wide financial statements
$ 2,841,297
-46-
NOTE 3 — INTERFUND BALANCES AND TRANSFERS
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 2016 was $5,963.
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 2016 was $7,020.
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 percent. Interest for 2016 was $22,083.
C. Interfund Transfers
Interfund transfers for the 2016 fiscal year were as follows:
(1) Transfers to finance current or future capital purchases or construction.
(2) Transfers to allocate bond proceeds to cover project costs incurred prior to bond sale or to meet debt service needs
(3) Transfer to support general Fund budget.
-47-
Transfers In
Nonmajor
Storm
Transfers Out
General Governmental
Water
Total
General
$ — $ 1,520,950
(1) $
700,000 (1) $
2,220,950
Brookview Community Center Capital Project
— 800,000
(2)
—
800,000
Douglas Drive Improvements Capital Project
— 161,000
(2)
—
161,000
Nonmajor governmental
— 40,000
(1)
—
40,000
Motor Vehicle Operating Enterprise
30,000 (3) —
—
30,000
Total
$ 30,000 $ 2,521,950
$
700,000 $
3,251,950
(1) Transfers to finance current or future capital purchases or construction.
(2) Transfers to allocate bond proceeds to cover project costs incurred prior to bond sale or to meet debt service needs
(3) Transfer to support general Fund budget.
-47-
NOTE 4 — CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2016 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
8,444,957
8,752,021
— (5,930,175)
11,266,803
Total capital assets, not depreciated
11,972,642
8,752,021
— (5,930,175)
14,794,488
Capital assets, depreciated
(57,369,453)
(4,953,990)
— —
(62,323,443)
Land improvements
5,443,204
42,771
(14,244) 162,089
5,633,820
Buildings and improvements
12,946,453
274,271
— 627,621
13,848,345
Machinery and equipment
12,242,958
1,123,018
(1,042,205) 121,550
12,445,321
Infrastructure
111,632,158
—
— 4,018,915
115,651,073
Total capital assets, depreciated
142,264,773
1,440,060
(1,056,449) 4,930,175
147,578,559
Less accumulated depreciation on
Land improvements
(3,278,554)
(173,493)
14,244 —
(3,437,803)
Buildings and improvements
(10,478,503)
(243,088)
— —
(10,721,591)
Machinery and equipment
(6,583,402)
(930,136)
1,018,416 —
(6,495,122)
Infrastructure
(57,369,453)
(4,953,990)
— —
(62,323,443)
Total accumulated depreciation
(77,709,912)
(6,300,707)
1,032,660 —
(82,977,959)
Net capital assets, depreciated
64,554,861
(4,860,647)
(23,789) 4,930,175
64,600,600
Total capital assets, net
$ 76,527,503
$ 3,891,374
$ (23,789) $ (1,000,000)
$ 79,395,088
B. Changes in Capital Assets Used in Business -Type Activities
Capital assets, not depreciated
Land
Construction in progress
Total capital assets, not depreciated
Capital assets, depreciated
Land improvements
Buildings and improvements
Machinery and equipment
Infrastructure — distribution
and collection systems
Total capital assets, depreciated
Less accumulated depreciation on
Land improvements
Buildings and improvements
Machinery and equipment
Infrastructure — distribution
and collection systems
Total accumulated depreciation
Net capital assets, depreciated
Total capital assets, net
Beginning
of Year Additions
$ 857,044 $ — $
1,704,043 3,562,704
2,561,087 3,562,704
Transfers and
Completed
Deletions Construction End of Year
— $ — $ 857,044
(70,955) 5,195,792
— (70,955) 6,052,836
3,090,230
91,306 — — 3,181,536
667,657
— — — 667,657
4,221,304
354,090 (227,747) — 4,347,647
40,475,677
— — 1,070,955 41,546,632
48,454,868
445,396 (227,747) 1,070,955 49,743,472
(2,528,223) (53,435) (2,581,658)
(482,849) (17,512) — — (500,361)
(2,956,514) (272,713) 227,747 — (3,001,480)
(14,037,075) (1,244,154) — — (15,281,229)
(20,004,661) (1,587,814) 227,747 — (21,364,728)
28,450,207 (1,142,418) — 1,070,955 28,378,744
$ 31,011,294 $ 2,420.286 $ — $ 1,000,000 $ 34,431,580
NOTE 4 — CAPITAL ASSETS (CONTINUED)
C. Depreciation Expense by Function
Depreciation expense for the year ended December 31, 2016 was charged to the following functions:
Governmental activities
General government
Public safety
Physical development
Parks and recreation
Capital assets held by the City's internal service funds —
charged to the various functions based on usage of the assets
Total depreciation expense — governmental activities
Business -type activities
Utility (water and sewer)
Storm sewer utility
Brookview (golf course) operating
Motor vehicle operating
Total depreciation expense — business -type activities
-49-
108,205
415,666
5,430,118
333,149
13,569
$ 6,300,707
$ 789,984
696,875
98,095
2,860
$ 1,587,814
NOTE 5 — LONG-TERM LIABILITIES
A. Long -Term Liabilities
The City's long-term liabilities at December 31, 2016 are as follows:
Governmental activities
General obligation special assessment bonds
Improvement Bonds of 2007C
Improvement Bonds of 2008A
Improvement Bonds of 2009A
Improvement Refunding Bonds of 2009D
Improvement Bonds of 2010A
Improvement Bonds of 2011A
Improvement Refunding Bonds of 2011C
Improvement Bonds of 2012A
Improvement Refunding Bonds of 2012C
Improvement Bonds of 2013A
Improvement Refunding Bonds of 2013B
Improvement Bonds of 2014A
Improvement Refunding Bonds of 2014C
Improvement Bonds of 2015A
Improvement Refunding Bonds of 2015C
Improvement Bonds of 2016A
General obligation street reconstruction bonds
Street Reconstruction Bonds of 2016C
General obligation certificates of indebtedness
Equipment Certificates of 2013A
Equipment Certificates of 2014B
Equipment Certificates of 2015B
Equipment Certificates of 2016B
General obligation tax abatement bonds
Tax Abatement Refunding Bonds of 2013A
General obligation state -aid street bonds
State -Aid Street Bonds of 2007A
Lease Revenue Bonds
2016C Lease Revenue Bonds (Brookview
Community Center)
Unamortized premiums
Compensated absences payable
Net pension liability - PERA
Net OPEB obligation
Total governmental activity long-term liabilities
Business -type activities
General obligation revenue bonds
Utility Revenue Bonds of 2016D
Unamortized premiums
Total business -type activity long-term liabilities
Total government -wide long -tern liabilities
Final Balance -
Original Issue Interest Rate Issue Date Maturity Date End of Year
$ 4,105,000
4.00-4.50%
06/15/2007
02/01/2027
$ 3,940,000
$ 6,680,000
3.50-4.25%
06/15/2008
02/01/2028
6,490,000
$ 7,305,000
2.00-4.00%
05/01/2009
02/01/2029
5,675,000
$ 5,465,000
2.00-4.00%
08/19/2009
02/01/2018
1,730,000
$ 3,845,000
2.00-4.00%
06/15/2010
02/01/2030
2,735,000
$ 1,840,000
2.00-4.00%
05/15/2011
02/01/2031
1,490,000
$ 4,870,000
2.00-3.00%
05/15/2011
02/01/2019
1,925,000
$ 1,575,000
2.00-3.00%
05/15/2012
02/01/2032
1,380,000
$ 5,960,000
2.00-2.25%
05/15/2012
02/01/2025
5,735,000
$ 1,735,000
1.25-3.00%
05/21/2013
02/01/2033
1,495,000
$ 7,025,000
2.00%
05/21/2013
02/01/2026
7,025,000
$ 2,335,000
1.00-3.40%
06/19/2014
02/01/2035
2,235,000
$ 3,950,000
2.00-4.00%
06/19/2014
02/01/2027
3,950,000
$ 1,870,000
3.00-3.50%
07/15/2015
02/01/2036
1,760,000
$ 6,600,000
2.00-2.50%
07/15/2015
02/01/2028
6,600,000
$ 1,290,000
2.00-3.00%
07/07/2016
02/01/2037
1,290,000
55,455,000
$ 5,630,000
2.13-4.00%
07/07/2016
02/01/2037
5,630,000
$ 750,000
1.25%
05/21/2013
02/01/2017
250,000
$ 750,000
0.40-0.90%
06/19/2014
02/01/2018
500,000
$ 800,000
2.00%
07/15/2015
02/01/2019
800,000
$ 800,000
2.00%
07/07/2016
02/01/2020
800,000
2,350,000
$ 2,075,000
1.25%
05/21/2013
02/01/2019
1,015,000
$ 2,560,000
4.00-4.125%
03/15/2007
04/01/2027
1,640,000
$ 17,410,000
2.00-4.00%
10/19/2016
02/01/2037
17,410,000
2,043,531
1,575,785
21,506,136
859,334
109,484,786
$ 2,580,000
2.13-3.00%
10/19/2016
02/01/2037
2,580,000
41,745
2,621,745
$112,106,531
-50-
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.
o Improvement Refunding Bonds of 2013B — These bonds were used to refund the 2017
through 2026 maturities of the City's G.O. Improvement Bonds, Series 2006B, on their
February 1, 2016 call date. This "crossover refunding" reduced the City's total future debt
service payments by $1,169,090 and result in a present value savings of $960,871.
o Improvement Refunding Bonds of 2014C — These bonds will be used to refund the 2018
through 2027 maturities of the City's G.O. Improvement Bonds, Series 2007C, on their
February 1, 2017 call date. Until the call date, the City will make all debt service payments
on the 2007C issue, and all debt service on the 2014C issue will be paid from the refunding
escrow account. This "crossover refunding" will reduce the City's total future debt service
payments by $394,750 and result in a present value savings of $343,445.
o Improvement Refunding Bonds of 2015C — These bonds will be used to refund the 2019
through 2028 maturities of the City's G.O. Improvement Bonds, Series 2008A, on their
February 1, 2018 call date. Until the call date, the City will make all debt service payments
on the 2008A issue, and all debt service on the 2015C issue will be paid from the refunding
escrow account. This "crossover refunding" will reduce the City's total future debt service
payments by $617,605 and result in a present value savings of $553,034.
• 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 — The City has four outstanding issues of general obligation
certificates of indebtedness, issued in accordance with Minnesota Statutes § 412.301 to finance
various equipment purchases, which will be repaid primarily with ad valorem tax levies.
• Tax Abatement Bonds — The general obligation tax abatement refunding bonds, issued in
accordance with Minnesota Statutes § 469.1813 to finance various improvements, will be repaid
primarily with ad valorem tax levies.
• 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 Fund and will be repaid from revenue sources of that fund.
-51-
NOTE 5 - LONG-TERM LIABILITIES (CONTINUED)
• Other Long -Term Liabilities - The City provides its employees with various benefits, including
compensated absences, pensions, and other post -employment benefits (OPEB), as described
elsewhere in these notes. These benefits are paid from the Payroll Benefits Internal Service Fund.
C. Minimum Debt Payments
Minimum annual payments to retire bonds and certificates of indebtedness are as follows:
-52-
Governmental Activities
General Obligation
General Obligation
General Obligation
Year Ending
Special Assessment Bonds
Street Reconstruction Bonds
Certificates of Indebtedness
December 31,
Principal
Interest
Principal
Interest
Principal
Interest
2017
$
7,560,000
$ 1,477,160
$
-
$ 160,493
$ 765,000 $
35,042
2018
10,115,000
1,149,126
225,000
148,213
780,000
22,525
2019
3,170,000
923,834
225,000
143,713
535,000
10,750
2020
3,000,000
854,224
230,000
139,163
270,000
2,700
2021
3,235,000
785,057
235,000
134,513
2022-2026
19,170,000
2,602,464
1,260,000
587,638
2027-2031
7,730,000
603,830
1,435,000
412,481
2032-2036
1,415,000
72,265
1,655,000
181,575
-
-
2037
60,000
-
365,000
5,475
-
-
$
55,455,000
$ 8,467,960
$
5,630,000
$ 1,913,264
$ 2,350,000 $
71,017
Governmental Activities
General Obligation
General Obligation
HRA
Year Ending
Tax Abatement Bonds
State -Aid Street Bonds
Lease Revenue Bonds
December 31,
Principal
Interest
Principal
Interest
Principal
Interest
2017
$
345,000
$ 10,531
$
120,000
$ 64,431
$ - $
452,610
2018
340,000
6,250
125,000
59,532
475,000
573,050
2019
330,000
2,063
130,000
54,431
650,000
558,550
2020
135,000
49,131
670,000
538,750
2021
145,000
43,531
690,000
518,350
2022-2026
805,000
122,616
3,825,000
2,184,725
2027-2031
-
-
180,000
3,713
4,520,000
1,484,825
2032-2036
-
-
-
-
5,400,000
597,100
2037
-
-
-
-
1,180,000
17,700
$
1,015,000
$ 18,844
$
1,640,000
$ 397,385
$ 17,410,000 $
6,925,660
Business -Type
Activities
Year Ending
Utility Revenue Bonds
December 31,
Principal
Interest
2017
$
-
$ 49,742
2018
-
63,500
2019
-
63,500
2020
120,000
62,300
2021
120,000
59,900
2022-2026
645,000
261,750
2027-2031
715,000
181,697
2032-2036
805,000
85,566
2037
175,000
2,625
$
2,580,000
$ 830,580
-52-
NOTE 5 — LONG-TERM LIABILITIES (CONTINUED)
D. Revenue Pledged
Future revenue pledged for the payment of long-term debt is as follows:
Revenue Pledged
Percent of Remaining
Use of Total Term of Principal
Bond Issue Proceeds Type Debt Service Pledge and Interest
Utility Revenue Bonds, Storm sewer
Series 2016D improvements Utility charges
E. Changes in Long -Term Debt
Governmental activities
G.O. special assessment bonds
G.O. street reconstruction bonds
G.O. certificates of indebtedness
G.O. tax abatement bonds
G.O. state -aid street bonds
HRA lease revenue bonds
Unamortized premiums
Compensated absences
Net pension liability — PERA
Net OPEB obligation
Total governmental activities
Business -type activities
Utility revenue bonds
Unamortized premiums
Total business -type activities
Total
F. Conduit Debt Obligations
Balance —
Beginning
of Year
Current Year
Principal Pledged
and Interest Revenue
Paid Received
100% 2016-2037 $ 2,580,000 $ — $ 2,241,536
Balance — Due Within
Additions Deletions End of Year One Year
$ 64,860,000 $ 1,290,000 $ 10,695,000 $ 55,455,000 $ 7,560,000
—
5,630,000
—
5,630,000
—
2,295,000
800,000
745,000
2,350,000
765,000
1,360,000
—
345,000
1,015,000
345,000
1,760,000
—
120,000
1,640,000
120,000
—
17,410,000
—
17,410,000
—
1,200,577
1,026,242
183,288
2,043,531
—
1,508,910
1,131,669
1,064,794
1,575,785
1,073,366
9,293,069
15,243,854
3,030,787
21,506,136
—
715,375
177,143
33,184
859,334
—
82,992,931
42,708,908
16,217,053
109,484,786
91863,366
910,000 2,580,000 910,000 2,580,000 -
- 41,745 — 41,745 —
910,000 2,621,745 910,000 2,621,745 —
$ 83,902,931 $ 45,330,653 $ 17,127,053 $112,106,531 $ 9,863,366
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, 2016, the
following conduit debt issues were outstanding:
Type of Debt
Multi -family housing revenue bonds
Governmental/nonprofit revenue bonds
Principal
Number Outstanding
Years Issued
of Issues at Year -End
1999-2006
2 $ 5,259,598
2007-2009
2 3,077,387
4 $ 8,336,985
-53-
NOTE 6 — COMPONENTS OF FUND BALANCE
At December 31, 2016, the City had the following fund balances:
NOTE 7 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN
A. Plan Description
The City provides post -employment benefits to certain eligible employees through the City's OPEB Plan,
a single -employer defined benefit plan administered by the City. All post -employment benefits are based
on contractual agreements with employee groups. These contractual agreements do not include any
specific contribution or funding requirements. The plan does not issue a publicly available financial
report. These benefits are summarized as follows:
Post -Employment Insurance Benefits — All retirees of the City have the option under state law to
continue their medical insurance coverage through the City from the time of retirement until the
employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree
must pay the full premium to continue coverage for medical and dental insurance. The City is legally
required to include any retirees for whom it provides health insurance coverage in the same insurance
pool as its active employees, whether the premiums are paid by the City or the retiree. Consequently,
participating retirees are considered to receive a benefit known as an "implicit rate subsidy." This
benefit relates to the assumption that the retiree receives 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.
-54-
Winnetka/
Street
Brookview
Medicine Lake
Capital
Douglas Drive
Reconstruction
Community Center
Tax Increment
Improvement
Improvement
General
Debt Service
Capital Project
Capital Project
Capital Project
Capital Project
Nonmajor
Total
Nonspendable
Prepaid items
$ 18,822
$ —
$ —
$ —
$ —
$ —
$ —
$ 18;822
Restricted
Debt service
—
18,815,953
—
—
—
—
2,762,073
21,578,026
Redevelopment
—
—
—
—
—
—
312,778
312,778
Street improvements
—
—
—
—
—
2,532,277
2,217,261
4,749,538
State -aid street improvements
—
—
—
—
—
—
2,465,358
2,465,358
Brook -view Community Center
—
—
14,891,083
—
—
—
286,090
15,177,173
Cemetery maintenance
—
—
—
—
—
—
78,413
78,413
DWI enforcement
95,804
95,804
Total restricted
—
18,815,953
14,891,083
—
—
2,532,277
8,217,777
44,457,090
Committed
Human service needs
—
—
—
—
—
—
208,846
208,846
Assigned
Street improvements
—
—
—
—
—
4,876
815,514
820,390
Cable improvements
—
—
—
—
—
—
204,339
204,339
Park improvements
—
—
—
—
—
—
1,078,577
1,078,577
Brookview Community Center
—
—
1,087,985
—
—
—
—
1,087,985
Equipment replacement
—
—
—
—
—
—
3,433,791
3,433,791
Capital improvements
—
—
—
—
4,162,388
—
915,248
5,077,636
Self-insurance
2,000,000
2,000,000
Total assigned
2,000,000
—
1,087,985
—
4,162,388
4,876
6,447,469
13,702,718
Unassigned
8,954,274
—
—
(1,022,083)
—
—
(1,070)
7,931,121
Total
$10,973,096
$ 18,815,953
$ 15,979,068
$(1,022,083)
$ 4,162,388
$ 2,537,153
$14,873,022
$66,318,597
NOTE 7 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN
A. Plan Description
The City provides post -employment benefits to certain eligible employees through the City's OPEB Plan,
a single -employer defined benefit plan administered by the City. All post -employment benefits are based
on contractual agreements with employee groups. These contractual agreements do not include any
specific contribution or funding requirements. The plan does not issue a publicly available financial
report. These benefits are summarized as follows:
Post -Employment Insurance Benefits — All retirees of the City have the option under state law to
continue their medical insurance coverage through the City from the time of retirement until the
employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree
must pay the full premium to continue coverage for medical and dental insurance. The City is legally
required to include any retirees for whom it provides health insurance coverage in the same insurance
pool as its active employees, whether the premiums are paid by the City or the retiree. Consequently,
participating retirees are considered to receive a benefit known as an "implicit rate subsidy." This
benefit relates to the assumption that the retiree receives 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.
-54-
NOTE 7 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
Termination Pay Benefits — Certain employee groups may also become eligible to earn a
termination pay benefit payable at retirement in an amount equal to one day of pay per year of service
multiplied by their daily rate of pay at retirement. Eligibility for this benefit is based on years of
service and/or minimum age requirements. These benefits generally are paid into a post-retirement
healthcare savings plan administered by the Minnesota State Retirement System.
B. Funding Policy
The required contribution is based on projected pay-as-you-go financing requirements, with additional
amounts to pre -fund benefits as determined annually by the City.
C. Annual OPEB Cost and Net OPEB Obligation
The City's annual OPEB cost (expense) is calculated based on annual required contributions (ARC) of the
City, an amount determined on an actuarially determined basis in accordance with the parameters of
Governmental Accounting Standards Board (GASB) Statement Nos. 43 and 45. The ARC represents a
level funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize
any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The annual
OPEB cost is accrued in the Payroll Benefits Internal Service Fund. The liability is funded through
payments from the City's General Fund and enterprise funds.
The following table shows the components of the City's annual OPEB cost for the year, the amount
actually contributed to the plan, and the changes in the City's net OPEB obligation to the plan:
ARC
$ 172,877
Interest on net OPEB obligation
32,192
Adjustment to annual required contribution
(27,926)
Annual OPEB cost (expense)
177,143
Contributions made
33,184
Increase in net OPEB obligation
143,959
Net OPEB obligation — beginning of year
715,375
Net OPEB obligation — end of year
$ 859,334
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for the current and preceding year are as follows:
Fiscal Year Ended
December 31,
2014
2015
2016
Annual Employer
OPEB Cost Contribution
179,880 $ 124,581
184,537 $ 93,155
177,143 $ 33,184
D. Funded Status and Funding Progress
Percentage of
Annual OPEB
Net OPEB
Cost Contributed
Obligation
69.3%
$ 623,993
50.5%
$ 715,375
18.7%
$ 859,334
As of January 1, 2016, the most recent actuarial valuation date, the actuarial accrued liability for benefits
and unfunded actuarial accrued liability (UAAL) were both $1,460,308, as the plan was unfunded. The
covered payroll (annual payroll of active employees covered by the plan) was $9,238,970 and the ratio of
the UAAL to the covered payroll was 15.8 percent.
-55-
NOTE 7 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability occurrence of events far into the future. Examples include assumptions
about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the
funded status of the plan and ARC of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future. The Schedule of Funding
Progress immediately following the notes to basic financial statements presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative
to the actuarial accrued liabilities for benefits.
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are designed
to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.
In the January 1, 2016 actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumptions included: a 4.5 percent investment rate of return (net of administrative expenses)
based on the City's own investments; an annual payroll growth rate of 3.5 percent; and an annual
healthcare trend rate of 9.0 percent initially, reduced by decrements to an ultimate rate of 5.0 percent after
12 years. The UAAL is being amortized on a level dollar basis over a closed period. The remaining
amortization period at January 1, 2016 was 30 years.
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE
A. Plan Description
The City participates in the following cost-sharing, multiple -employer defined benefit pension plans
administered by the 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. GERF
members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new
members in 1967. All new members must participate in the Coordinated Plan.
2. Public Employees Police and Fire Fund (PEPFF)
The 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.
-56-
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED)
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.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio
of the plan. Members in plans that are at least 90.0 percent funded for two consecutive years are given
2.5 percent increases. Members in plans that have not exceeded 90.0 percent funded, or have fallen below
80.0 percent, are given 1.0 percent increases.
The benefit provisions stated in the following paragraphs of this section are current provisions and apply
to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving
them yet are bound by the provisions in effect at the time they last terminated their public service.
1. 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 and Basic Plan members. The retiring member
receives the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula
(Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of
average salary for each of the first 10 years of service and 2.7 percent for each remaining year.
The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each
of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual
rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan
members for each year of service. For 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.
2. PEPFF Benefits
Benefits for PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a
prorated basis from 50 percent after five years up to 100 percent after 10 years of credited service.
Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated basis from
50 percent after 10 years up to 100 percent after 20 years of credited service. The annuity accrual
rate is 3 percent of average salary for each year of service. For PEPFF 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.
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
Basic Plan members and Coordinated Plan members were required to contribute 9.10 percent and
6.50 percent, respectively, of their annual covered salary in calendar year 2016. The City was
required to contribute 11.78 percent of pay for Basic Plan members and 7.50 percent for
Coordinated Plan members in calendar year 2016. The City's contributions to the GERF for the
year ended December 31, 2016 were $507,606. The City's contributions were equal to the
required contributions as set by state statutes.
-57-
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED)
2. PEPFF Contributions
Plan members were required to contribute 10.8 percent of their annual covered salary in calendar
year 2016. The City was required to contribute 16.2 percent of pay for PEPFF members in
calendar year 2016. The City's regular contributions to the PEPFF for the year ended
December 31, 2016 were $506,383. The City's contributions were equal to the required
contributions as set by state statutes.
D. Pension Costs
1. GERF Pension Costs
At December 31, 2016, the City reported a liability of $8,704,108 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 $6 million to the fund in 2016. The state of Minnesota is
considered a nonemployer contributing entity and the state of Minnesota'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 $113,679. The net pension liability was
measured as of June 30, 2016, 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, 2015 through June 30, 2016,
relative to the total employer contributions received from all of the PERA's participating
employers. At June 30, 2016, the City's proportionate share was 0.1072 percent, which was a
decrease of 0.0013 percent from its proportion measured as of June 30, 2015.
For the year ended December 31, 2016, the City recognized pension expense of $1,103,671 for its
proportionate share of the GERF's pension expense. In addition, the City recognized an
additional $33,896 as pension expense (and grant revenue) for its proportionate share of the state
of Minnesota's contribution of $6 million to the GERF.
At December 31, 2016, 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:
Differences between expected and actual economic experience
Changes in actuarial assumptions
Differences between projected and actual investment earnings
Changes in proportion
Contributions paid to the PERA subsequent to the
measurement date
Total
Deferred
Deferred
Outflows
Inflows
of Resources
of Resources
$ —
$ 709,344
1,704,271
—
1,656,861
-
-
299,497
275,975 —
$ 3,637,107 $ 1,008,841
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED)
Deferred outflows of resources reported $275,975 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, 2017. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Year Ending
December 31,
2017
2018
2019
2020
2. PEPFF Pension Costs
Pension
Expense
Amount
606,300
606,300
825,283
314,408
At December 31, 2016, the City reported a liability of $12,802,028 for its proportionate share of
the PEPFF's net pension liability. The net pension liability was measured as of June 30, 2016,
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, 2015 through June 30, 2016, relative to the total employer
contributions received from all of the PERA's participating employers. At June 30, 2016, the
City's proportion was 0.319 percent, which was a decrease of 0.004 percent from its proportion
measured as of June 30, 2015.
For the year ended December 31, 2016, the City recognized pension expense of $2,202,903 for its
proportionate share of the PEPFF's pension expense. The City also recognized $28,710 for the
year ended December 31, 2016, as pension expense (and an offsetting reduction of net pension
liability) for its proportionate share of the state of Minnesota's on -behalf contributions to the
PEPFF. In 2013, legislation passed and required the state of Minnesota to begin contributing
$9 million to the PEPFF each year, starting in fiscal year 2014.
At December 31, 2016, 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:
Differences between expected and actual economic experience
Changes in actuarial assumptions
Differences between projected and actual investment earnings
Changes in proportion
Contributions paid to the PERA subsequent to the
measurement date
Total
IM1
Deferred
Deferred
Outflows
Inflows
of Resources
of Resources
$ —
$ 1,474,531
7,045,514
—
1,959,618
-
-
66,676
273,075 —
$ 9,278,207 $ 1,541,207
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED)
Deferred outflows of resources reported $273,075 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, 2017. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Pension
Year Ending Expense
December 31, Amount
2017
$
1,605,485
2018
$
1,605,485
2019
$
1,605,485
2020
$
1,445,624
2021
$
1,201,846
E. Actuarial Assumptions
The total pension liability in the June 30, 2016 actuarial valuation was determined using the following
actuarial assumptions:
Inflation 2.50% per year
Active member payroll growth 3.25% per year
Investment rate of return 7.50%
Salary increases were based on a service -related table. Mortality rates for active members, retirees,
survivors, and disabilitants were based on RP -2014 tables for the GERF and RP -2000 tables for the
PEPFF for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for
retirees are assumed to be 1 percent per year for all future years for the GERF and the PEPFF.
Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial
experience studies. The most recent four-year experience study in the GERF was completed in 2015. The
experience study for the PEPFF was for the period July 1, 2004 through June 30, 2009.
There following changes in actuarial assumptions occurred in 2016:
1. GERF
• 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 future years.
• The assumed investment return was changed from 7.90 percent to 7.50 percent. The single
discount rate was changed from 7.90 percent to 7.50 percent.
• Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent
to 3.25 percent for payroll growth and 2.50 percent for inflation.
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED)
2. PEPFF
The assumed post-retirement benefit increase rate was changed from 1.00 percent per year
through 2037 and 2.50 percent 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.
The State Board of Investment, which manages the investments of the PERA, prepares an analysis of the
reasonableness of the long-term expected rate of return on a regular basis 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:
F. Discount Rate
The discount rate used to measure the total pension liability in 2016 was 7.5 percent, a reduction from the
7.9 percent used in 2015. The projection of cash flows used to determine the discount rate assumed that
employee and employer contributions will be made at the rate specified in state statutes. Based on these
assumptions, fiduciary net position of the GERF was projected to be available to make all projected future
benefit payments of current plan members. Therefore, the long-term expected rate of return on pension
plan investments was applied to all periods of projected benefit payments to determine the total pension
liability.
In the PEPFF, the fiduciary net position was projected to be available to make all projected future benefit
payments of current plan members through June 30, 2056. Beginning in fiscal year ended June 30, 2057,
when projected benefit payments exceed the funds' projected fiduciary net position, benefit payments
were discounted at the municipal bond rate of 2.85 percent based on an index of 20 -year general
obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount
rate of 5.60 percent was determined that produced approximately the same present value of projected
benefits when applied to all years of projected benefits as the present value of projected benefits using
7.50 percent applied to all years of projected benefits through the point of asset depletion and 2.85 percent
thereafter.
-61-
Long -Term
Expected
Target
Real Rate
Asset Class
Allocation
of Return
Domestic stocks
45 %
5.50
%
International stocks
15 %
6.00
%
Bonds
18 %
1.45
%
Alternative assets
20 %
6.40
%
Cash
2 %
0.50
%
F. Discount Rate
The discount rate used to measure the total pension liability in 2016 was 7.5 percent, a reduction from the
7.9 percent used in 2015. The projection of cash flows used to determine the discount rate assumed that
employee and employer contributions will be made at the rate specified in state statutes. Based on these
assumptions, fiduciary net position of the GERF was projected to be available to make all projected future
benefit payments of current plan members. Therefore, the long-term expected rate of return on pension
plan investments was applied to all periods of projected benefit payments to determine the total pension
liability.
In the PEPFF, the fiduciary net position was projected to be available to make all projected future benefit
payments of current plan members through June 30, 2056. Beginning in fiscal year ended June 30, 2057,
when projected benefit payments exceed the funds' projected fiduciary net position, benefit payments
were discounted at the municipal bond rate of 2.85 percent based on an index of 20 -year general
obligation bonds with an average AA credit rating at the measurement date. An equivalent single discount
rate of 5.60 percent was determined that produced approximately the same present value of projected
benefits when applied to all years of projected benefits as the present value of projected benefits using
7.50 percent applied to all years of projected benefits through the point of asset depletion and 2.85 percent
thereafter.
-61-
NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED)
G. Pension Liability Sensitivity
The following presents the City's proportionate share of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding page, 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:
H. 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 PERA website at www.mnpera.org.
NOTE 9 — DEFINED CONTRIBUTION PENSION PLAN — STATE-WIDE
The City Council members 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 elect to participate. An
eligible elected official who decides to participate contributes 5 percent of 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 percent of employer contributions and twenty-five hundredths of 1 percent
(0.0025) of the assets in each member's account annually.
Total contributions made by the City for the last three fiscal years were:
Contribution Amount Percentage of Covered Payroll Required Rate
Employee Employer Employee Employer for Employees
2014 $ 1,636 $ 1,636 5% 5% 5%
2015 $ 1,500 $ 1,500 5% 5% 5%
2016 $ 1,561 $ 1,561 5% 5% 5%
-62-
1% Decrease in
1% Increase in
Discount Rate
Discount Rate
Discount Rate
6.50%
7.50%
8.50%
The City's proportionate share of
the GERF net pension liability
$ 12,362,413
$ 8,704,108
$ 5,690,661
1% Decrease in
1% Increase in
Discount Rate
Discount Rate
Discount Rate
4.60%
5.60%
6.60%
The City's proportionate share of
the PEPFF net pension liability
$ 17,921,136
$ 12,802,028
$ 8,619,323
H. 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 PERA website at www.mnpera.org.
NOTE 9 — DEFINED CONTRIBUTION PENSION PLAN — STATE-WIDE
The City Council members 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 elect to participate. An
eligible elected official who decides to participate contributes 5 percent of 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 percent of employer contributions and twenty-five hundredths of 1 percent
(0.0025) of the assets in each member's account annually.
Total contributions made by the City for the last three fiscal years were:
Contribution Amount Percentage of Covered Payroll Required Rate
Employee Employer Employee Employer for Employees
2014 $ 1,636 $ 1,636 5% 5% 5%
2015 $ 1,500 $ 1,500 5% 5% 5%
2016 $ 1,561 $ 1,561 5% 5% 5%
-62-
NOTE 10 — 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 Golden Valley Department Relief Association (the Association). As of
December 31, 2015, the plan covered 53 active firefighters and 6 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, 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, 2016 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.
D. Pension Costs
At December 31, 2016, the City reported a net pension liability (asset) of ($1,701,716) for the plan. The
net pension liability (asset) was measured as of December 31, 2015. The total pension liability used to
calculate the net pension liability (asset) in accordance with GASB Statement No. 68 was determined by
Van Iwaarden Associates applying an actuarial formula to specific census data certified by the
Department as of December 31, 2015.
For the year ended December 31, 2016, the City recognized pension expense of $112,104. The City also
recognized $148,972 as revenue for the state of Minnesota's on -behalf contributions to the Department.
-63-
NOTE 10 — DEFINED BENEFIT PENSION PLAN — FIRE RELIEF ASSOCIATION
(CONTINUED)
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)
Beginning balance — January 1, 2015 $ 2,724,558 $ 4,630,487 $ (1,905,929)
Changes for the year
Service cost
Interest on pension liability (asset)
Changes of assumptions
Contributions (state and city)
Net investment income
Benefit payments, including
member contribution refunds
Administrative costs
Total net changes
Ending balance — December 31, 2015
162,663 — 162,663
198,248 — 198,248
(44,179) — (44,179)
148,972 (148,972)
(20,626) 20,626
(110,208) (110,208) -
- (15,827) 15,827
206,524 2,311 204,213
$ 2,931,082 $ 4,632,798 $ (1,701,716)
At December 31, 2016, the City reported deferred inflows and outflows of resources related to pensions
from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between projected and actual investment earnings $ 259,617 $ —
Changes in actuarial assumptions — 39,982
State aid to the City subsequent to the measurement date 151,252 151,252
Total $ 410,869 $ 191,234
Deferred outflows of resources totaling $151,252 related to pensions resulting from the City's
contributions to the plan subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31, 2017. Deferred inflows of resources totaling $151,252
related to state aid received subsequent to the measurement date will be recognized for its impact on the
net pension liability in the year ended December 31, 2017. Other amounts reported as deferred outflows
and inflows of resources related to the plan will be recognized in pension expense as follows:
Year Ending
December 31,
Pension
Expense
Amount
2017
$
59,305
2018
$
59,305
2019
$
59,306
2020
$
64,917
2021
$
(4,196)
Thereafter
$
(19,002)
-64-
NOTE 10 — DEFINED BENEFIT PENSION PLAN — FIRE RELIEF ASSOCIATION
(CONTINUED)
E. Actuarial Assumptions
The total pension liability at December 31, 2015 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
Salary increases 2.50% per year
Cost of living increases 0.00% per year
Investment rate of return 4.00%
20 -year municipal bond yield 3.50%
There were no changes in actuarial assumptions in 2015.
The 4 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 using 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 arithmetic real rates of return for each major asset class are
summarized in the following table:
Long -Term Long -Term
Target Expected Real Expected Nominal
Asset Class Allocation Rate of Return Rate of Return
Domestic equity
62.41 %
International equity
11.85
Fixed income
22.84
Real estate and alternatives
0.76
Cash and equivalents
2.14
5.52 %
8.27 %
5.78
8.53
2.12
4.87
4.12
6.87
0.82
3.54
Total 100.00 % 7.50 %
F. Discount Rate
The discount rate used to measure the total pension liability was 7.5 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.
-65-
NOTE 10 — DEFINED BENEFIT PENSION PLAN — FIRE RELIEF ASSOCIATION
(CONTINUED)
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 I% Increase in
Discount Rate Discount Rate Discount Rate
6.50% 7.50% 8.50%
Defined benefit plan $ (1,612,748) $ (1,701,716) $ (1,788,103)
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 Golden Valley City Hall.
NOTE 11— 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 pre-tax 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 pre-tax 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 12 — TAX INCREMENT FINANCING DISTRICTS AND TAX ABATEMENTS
The City is the administering authority for the following tax increment financing (TIF) districts:
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. 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, 2016 is $216,453, and tax increment revenue rebated was $28,406 for
2016.
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,
2016 is $2,622,070. No tax increment revenue was rebated under this agreement in 2016.
IMO A
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 2016
Original
$ 6,650
$ 65,390
$ 6,426
$ 79,060
Current
37,900
53,516
6,426
79,060
Captured — retained
$ 31,250
$ (11,874)
$ —
$ —
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. 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, 2016 is $216,453, and tax increment revenue rebated was $28,406 for
2016.
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,
2016 is $2,622,070. No tax increment revenue was rebated under this agreement in 2016.
IMO A
NOTE 13 — 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 operations based half on the
assessed valuation of all taxable property, and half on 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.
The following financial information is from the Commission's audited financial statements for the year
ended January 31, 2017, which are available at Golden Valley City Hall:
Total assets — all current $ 4,709,943
Total liabilities — all current 672,448
Net position $ 4,037,495
Revenue $ 2,476,496
Expenses 3,540,517
Change in net position $ (1,064,021)
Of the total revenue, $490,344 represented assessments to member cities. The City's 2016 portion was
$127,675, or 26.0 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 assets
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.
.:
NOTE 13 — JOINT POWERS AGREEMENTS (CONTINUED)
The following financial information is from the JWC's audited financial statements for the year ended
December 31, 2016, which are available at Golden Valley City Hall:
Total assets $ 16,162,977
Total liabilities 544,223
Net position $ 15,618,754
Revenue $ 7,730,658
Expenses 6,724,714
Change in net position $ 1,005,944
Of the total revenues, $7,592,332 represented assessments paid by member cities. Of the total member
assessments, $3,139,282, or 41.3 percent, was paid by the City.
NOTE 14 — 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, 2016, the City is committed to various construction contracts for the improvement of
city property. The City's remaining commitment under these contracts is approximately $23,082,603.
NOTE 15 — DEFICIT FUND BALANCES/NET POSITION
At December 31, 2016, the Winnetka/Medicine Lake Tax Increment Capital Project Fund reported a
deficit fund balance of $1,022,083. The deficit is due to project costs incurred in advance of funding, and
will be eliminated through future revenues and other financing sources.
At December 31, 2016, the Highway 55 West Tax Increment Capital Project Fund reported a deficit fund
balance of $1,070. The deficit is due to project costs incurred in advance of funding, and will be
eliminated through future revenues and other financing sources.
At December 31, 2016, the Payroll Benefits Internal Service Fund reported a deficit net position of
$9,866,236. The deficit is due to the fund reporting the City's proportionate share of net pension liabilities
related to two state-wide, multi-employer, cost-sharing 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.
NOTE 16 — SUBSEQUENT EVENTS
In June 2017, the City Council authorized management to proceed with the sale of two new debt issues.
The first issue is $7,710,000 of General Obligation Improvement and Equipment Bonds, Series 2017A.
The proceeds of this issue will be used to fund the City's annual pavement program, refund an
outstanding bond issue, and to finance various equipment purchases. The second issue is $1,935,000 of
General Obligation Tax Increment Improvement Bonds, Series 2017B. The proceeds of this issue will
fund street and utility improvements in and near the Highway 55 West TIF District.
Mral
THIS PAGE INTENTIONALLY LEFT BLANK
REQUIRED SUPPLEMENTARY INFORMATION
Actuarial
Actuarial
Valuation Date —
Accrued
January 1,
Liability
Ratio Payroll
Payroll
2012
$ 1,710,953
2014
$ 1,714,926
2016
$ 1,460,308
AIMM IM9)11m"►ffi%100WA
Other Post -Employment Benefits Plan
Schedule of Funding Progress
(Unfunded)
Actuarial
Actuarial Value Accrued
of Plan Assets Liability
$ — $ 1,710,953
$ — $ 1,714,926
$ — $ 1,460,308
-71-
Unfunded
Liability as a
Funded Covered
Percentage of
Ratio Payroll
Payroll
— % $ 8,136,559
21.0%
— % $ 8,825,950
19.4%
— % $ 9,238,970
15.8%
CITY OF GOLDEN VALLEY
PERA — General Employees Retirement Fund
Schedule of City's and Non -Employer Proportionate Share of Net Pension Liability
12/31/2015 06/30/2015 0.1085% $ 5,623,033 $ — $ — $ 6,374,138 88.22% 78.20%
12/31/2016 06/30/2016 0.1072% $ 8,704,108 $ 113,679 $ 8,817,787 $ 6,649,482 130.90% 68.90%
PERA — General Employees Retirement Fund
Schedule of City Contributions
Contributions
Contributions
in Relation to
Proportionate
as a
Statutorily the Statutorily
Contribution
Percentage
City Fiscal Required Required
Deficiency
Covered of Covered
Share of the
(Excess)
Payroll Payroll
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
City Fiscal (Measurement
Pension
Net Pension
Net Pension
Net Pension
Covered
Covered
Pension
Year -End Date Date)
Liability
Liability
Liability
Liability
Payroll
Payroll
Liability
12/31/2015 06/30/2015 0.1085% $ 5,623,033 $ — $ — $ 6,374,138 88.22% 78.20%
12/31/2016 06/30/2016 0.1072% $ 8,704,108 $ 113,679 $ 8,817,787 $ 6,649,482 130.90% 68.90%
PERA — General Employees Retirement Fund
Schedule of City Contributions
Contributions
Contributions
in Relation to
as a
Statutorily the Statutorily
Contribution
Percentage
City Fiscal Required Required
Deficiency
Covered of Covered
Year -End Date Contributions Contributions
(Excess)
Payroll Payroll
12/31/2015 $ 509,632 $ 509,632 $ — $ 6,795,097 7.50%
12/31/2016 $ 507,606 $ 507,606 $ — $ 6,768,463 7.50%
Note 1: Changes in Plan Provisions. On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the GERF, which increased the
total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer
contributions were revised.
Note 2: Changes in Actuarial Assumptions. (1) 2015 Changes — 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. (2) 2016
Changes — 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 future years. The assumed investment return was changed from 7.90 percent to 7.50 percent. The single
discount rate was changed from 7.90 percent to 7.50 percent. Other assumptions were changed pursuant to the experience study dated June 30,
2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and
2.50 percent for inflation.
Note 3: 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.
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CITY OF GOLDEN VALLEY
PERA — Public Employees Police and Fire Fund
Schedule of City's Proportionate Share of Net Pension Liability
Plan Fiduciary
Net Position
as a
Percentage
of the Total
Pension
Liability
86.60%
63.90%
Note 1: Changes in Plan Provisions. The post-retirement benefit increase to be paid after attainment of the 90.0 percent
funding threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent.
Note 2: Changes in Actuarial Assumptions. (1) 2015 Changes — 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. (2) 2016 Changes — The assumed post-retirement benefit
increase rate was changed from 1.00 percent per year through 2037 and 2.50 percent 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 was 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.
Note 3: 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.
-73-
PERA — Public Employees Police and Fire Fund
City's
Schedule of City Contributions
Contributions
Proportionate
in Relation to
as a
Share of the
the Statutorily Contribution
Percentage
City's
City's
Required Deficiency Covered
Net Pension
Year -End Date
PERA Fiscal
Proportion
Proportionate
12/31/2015
Liability as a
$ 507,642 $ — $ 3,133,590
Year -End Date
of the Net
Share of the
City's
Percentage of
City Fiscal
(Measurement
Pension
Net Pension
Covered
Covered
Year -End Date
Date)
Liability
Liability
Payroll
Payroll
12/31/2015
06/30/2015
0.3230%
$ 3,670,036
$ 2,955,388
124.18%
12/31/2016
06/30/2016
0.3190%
$ 12,802,028
$ 3,072,358
416.68%
Plan Fiduciary
Net Position
as a
Percentage
of the Total
Pension
Liability
86.60%
63.90%
Note 1: Changes in Plan Provisions. The post-retirement benefit increase to be paid after attainment of the 90.0 percent
funding threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent.
Note 2: Changes in Actuarial Assumptions. (1) 2015 Changes — 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. (2) 2016 Changes — The assumed post-retirement benefit
increase rate was changed from 1.00 percent per year through 2037 and 2.50 percent 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 was 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.
Note 3: 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.
-73-
PERA — Public Employees Police and Fire Fund
Schedule of City Contributions
Contributions
Contributions
in Relation to
as a
Statutorily
the Statutorily Contribution
Percentage
City Fiscal
Required
Required Deficiency Covered
of Covered
Year -End Date
Contributions
Contributions (Excess) Payroll
Payroll
12/31/2015
$ 507,642
$ 507,642 $ — $ 3,133,590
16.20%
12/31/2016
$ 506,383
$ 506,383 $ — $ 3,125,427
16.20%
Plan Fiduciary
Net Position
as a
Percentage
of the Total
Pension
Liability
86.60%
63.90%
Note 1: Changes in Plan Provisions. The post-retirement benefit increase to be paid after attainment of the 90.0 percent
funding threshold was changed, from inflation up to 2.5 percent, to a fixed rate of 2.5 percent.
Note 2: Changes in Actuarial Assumptions. (1) 2015 Changes — 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. (2) 2016 Changes — The assumed post-retirement benefit
increase rate was changed from 1.00 percent per year through 2037 and 2.50 percent 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 was 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.
Note 3: 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.
-73-
CITY OF GOLDEN VALLEY
Golden Valley Fire Department Relief Association
Schedule of Changes in Net Pension Asset and Related Ratios
December 31, 2016
City fiscal year-end date
Golden Valley Fire Department Relief Association year-end date (measurement date)
Total pension liability
Service cost
Interest
Changes in assumptions
Benefit payments
Net change in total pension liability
Total pension liability — beginning
Total pension liability — ending
Plan fiduciary net position
Contributions (state and local)
Net investment income
Benefit payments
Administrative costs
Net change in plan fiduciary net position
Total pension liability — beginning
Total pension liability — ending
Net pension liability (asset) — ending
Plan fiduciary net position as a percentage
of the total pension liability
2015 2016
2014 2015
$ 158,309 $ 162,663
189,130 198,248
— (44,179)
(332,858) (110,208)
14,581 206,524
2,709,977 2,724,558
$ 2,724,558 $ 2,931,082
$ 143,581 $ 148,972
335,884 (20,626)
(332,858) (110,208)
(16,509) (15,827)
130,098 2,311
$ 4,500,389 $ 4,630,487
$ 4,630,487 $ 4,632,798
$ (1,905,929) $ (1,701,716)
169.95% 158.06%
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.
-74-
CITY OF GOLDEN VALLEY
Golden Valley Fire Department Relief Association
Schedule of City Contributions and Non -Employer Contributing Entities
December 31, 2016
City Contributions
City Fiscal Statutorily
Year Ended Required Actual Contribution
December 31, Contributions Contributions Excess
2014 $ 1,141 $ 1,141 $ —
2015 $ — $ — $ —
2016 $ — $ — $ —
Non -Employer
Contribution
State 2%
Fire Aid
$ 142,440
$ 148,972
$ 151,252
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.
-75-
SUPPLEMENTAL INFORMATION
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.
HRA General — used to account for the general activities of the City's HRA, a blended component unit.
Brookview Community Center — used to account for the revenues and expenditures of the Brookview
Community Center facility.
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.
Tax Abatement Bonds — used to account for accumulation of, resources for, and payment of debt service
on bonds sold to finance improvements within the Trunk Highway 55 and Boone Avenue intersection.
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.
CAPITAL PROJECT FUNDS
Building Fund — used to provide financing for major capital improvements made to the City's buildings.
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.
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.
State Aid Construction Fund — used to account for state construction aid received to finance qualifying
road projects.
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, and Highway 55
West No. 1506.
-76-
Assets
Cash and temporary investments
Receivables
Special assessments
Accounts
Due from other governmental units
Total assets
Liabilities
Accounts payable
Contracts payable
Due to other governmental units
Deposits
Due to other funds
Total liabilities
Deferred inflows of resources
Unavailable revenue — special assessments
Fund balances (deficits)
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities, deferred inflows of
resources, and fund balances
CITY OF GOLDEN VALLEY
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2016
Special Revenue Debt Service Capital Project Totals
$ 1,119,616 $ 2,762,073 $ 11,772,748 $ 15,654,437
68,286 68,286
1,275 1,275
11,758 — 41,812 53,570
$ 1,132,649 $ 2,762,073 $ 11,882,846 $ 15,777,568
$ 5,570 $ — $ 50,660 $ 56,230
459,536 459,536
— — 21,676 21,676
251,128 — 39,357 290,485
7,225 — 1,108 8,333
263,923 — 572,337 836,260
68,286 68,286
659,880 2,762,073 4,795,824
8,217,777
208,846 — —
208,846
6,447,469
6,447,469
— — (1,070)
(1,070)
868,726 2,762,073 11,242,223
14,873,022
$ 1,132,649 $ 2,762,073 $ 11,882,846 $ 15,777,568
-77-
CITY OF GOLDEN VALLEY
Nonmaj or Governmental Funds
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2016
Revenue
Ad valorem taxes
Tax increments
Special assessments
Intergovernmental revenue
Investment income
Otherrevenue
Lawful gambling proceeds
Miscellaneous
Total revenue
Expenditures
Current
General government
Public safety
Capital outlay
Debt service
Principal
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenue
over expenditures
Other financing sources (uses)
Sale of capital assets
Bonds issued
Premiums on bonds issued
Transfers in
Transfers (out)
Total other financing sources (uses)
Net change in fund balances
Fund balances
Beginning of year
End of year
Special Revenue Debt Service Capital Project Totals
$ - $ 1,033,400 $ - $ 1,033,400
24,727 24,727
- - 128,789 128,789
60,873 - 514,286 575,159
2,315 8,041 63,538 73,894
31,632 - - 31,632
69,666 71,367 213,503 354,536
164,486 1,112,808 944,843 2,222,137
77,105
-
-
77,105
60,009
60,009
27,343
-
4,037,110
4,064,453
-
1,090,000
120,000
1,210,000
-
324,136
104,020
428,156
164,457
1,414,136
4,261,130
5,839,723
29
(301,328)
(3,316,287)
(3,617,586)
80,627
80,627
-
146,609
1,998,391
2,145,000
-
381,935
21,217
403,152
285,950
613,610
1,622,390
2,521,950
(40,000)
(40,000)
245,950
11142,154
3,722,625
5,110,729
245,979
840,826
406,338
1,493,143
622,747
1,921,247
10,835,885
13,379,879
$ 868,726
$ 2,762,073
$ 11,242,223
$ 14,873,022
-78-
CITY OF GOLDEN VALLEY
Nonmajor Special Revenue Funds
Combining Balance Sheet
December 31, 2016
-79-
Brookview
Human
DWI
HRA
Community
Service
Cemetery
Enforcement
General
Center
Totals
Assets
Cash and temporary investments
$
213,141
$
78,413
$
84,046
$
457,926
286,090
$ 1,119,616
Receivables
Accounts
1,275
-
-
-
-
1,275
Due from other
governmental units
-
-
11,758
-
-
11,758
Total assets
$
214,416
$
78,413
$
95,804
$
457,926
$ 286,090
$ 1,132,649
Liabilities
Accounts payable
$
5,570
$
-
$
-
$
-
$ -
$ 5,570
Deposits
-
-
-
251,128
-
251,128
Due to other funds
-
-
-
7,225
-
7,225
Total liabilities
5,570
-
-
258,353
-
263,923
Fund balances
Restricted for cemetery
maintenance
-
78,413
-
-
-
78,413
Restricted for DWI enforcement
-
-
95,804
-
-
95,804
Restricted for redevelopment
-
-
-
199,573
-
199,573
Restricted for Brookview
Community Center
-
-
-
-
286,090
286,090
Committed for human
service needs
208,846
-
-
-
-
208,846
Total fund balances
208,846
78,413
95,804
199,573
286,090
868,726
Total liabilities and
fund balances
$
214,416
$
78,413
$
95,804
$
457,926
$ 286,090
$ 1,132,649
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CITY OF GOLDEN VALLEY
Nonmajor Special Revenue Funds
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2016
Revenue
Intergovernmental revenue
Investment income
Otherrevenue
Lawful gambling proceeds
Miscellaneous
Total revenue
Expenditures
Current
General government
Operating supplies
Professional services
Public safety
Salaries
Operating supplies
Capital outlay
Total expenditures
Excess (deficiency) of
revenue over expenditures
Other financing sources (uses)
Transfers in
Transfers (out)
Total other financing
sources (uses)
Net change in fund balances
Fund balances
Beginning of year
End of year
Human DWI
Service Cemetery Enforcement
1,219
31,632
35,682
68,533
11,957
50,000
61,957
6,576
6,576
$ 60,873 $
459 497
500 33,484 _
959 94,854
Brookview
HRA Community
General Center
Totals
- $ -
$ 60,873
- 140
2,315
- -
31,632
- -
69,666
- 140
164,486
- 15,148
- 3,383 -
- 56,626 -
27,343 -
- 87,352 15,148
959 7,502 (15,148)
- 11,957
- 65,148
- 3,383
- 56,626
27,343
- 164,457
140 29
285,950 285,950
(40,000) - - (40,000)
- (40,000) - 285,950 245,950
959 (32,498) (15,148) 286,090 245,979
202,270 77,454 128,302 214,721 - 622,747
$ 208,846 $ 78,413 $ 95,804 $ 199,573 $ 286,090 $ 868,726
-80-
CITY OF GOLDEN VALLEY
Nonmajor Debt Service Funds
Combining Balance Sheet
December 31, 2016
Certificates Tax Brookview Douglas Drive
of Abatement Lease Revenue Reconstruction
Indebtedness Bonds Bonds Bonds Totals
Assets
Cash and temporary investments $ 550,586 $ 1,356,294 $ 458,512 $ 396,681 $ 2,762,073
Fund balances
Restricted for debt service $ 550,586 $ 1,356,294 $ 458,512 $ 396,681 $ 2,762,073
-81-
CITY OF GOLDEN VALLEY
Nonmajor Debt Service Funds
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2016
Excess (deficiency) of
revenue over expenditures (48,882)
Other financing sources
Bonds issued 16,609
Premium on bonds issued
Transfers in
Total other financing sources 16,609
Net change in fund balances (32,273)
Fund balances
17,906 (178,689)
Certificates
Tax
Brookview
Douglas Drive
146,609
184,591
of
Abatement
Lease Revenue
Reconstruction
613,610
- 637,201
Indebtedness
Bonds
Bonds
Bonds
Totals
Revenue
Ad valorem taxes
$ 733,400
$ 300,000
$ -
$ -
$ 1,033,400
Investment income
652
6,613
223
553
8,041
Other revenue
Miscellaneous
-
71,367
-
-
71,367
Total revenue
734,052
377,980
223
553
1,112,808
Expenditures
Debt service
Principal
745,000
345,000
1,090,000
Interest and fiscal charges
37,934
15,074
178,912
92,216
324,136
Total expenditures
782,934
360,074
178,912
92,216
1,414,136
Excess (deficiency) of
revenue over expenditures (48,882)
Other financing sources
Bonds issued 16,609
Premium on bonds issued
Transfers in
Total other financing sources 16,609
Net change in fund balances (32,273)
Fund balances
17,906 (178,689)
(91,663)
(301,328)
130,000
146,609
184,591
197,344
381,935
452,610
161,000
613,610
- 637,201
488,344
1,142,154
17,906 458,512
396,681
840,826
Beginning of year 582,859 1,338,388 1,921,247
End of year $ 550,586 $ 1,356,294 $ 458,512 $ 396,681 $ 2,762,073
-82-
Assets
Cash and temporary investments
Receivables
Special assessments
Due from other governmental units
Total assets
Liabilities
Accounts payable
Contracts payable
Due to other governmental units
Deposits
Due to other funds
Total liabilities
Deferred inflows of resources
Unavailable revenue — special assessments
Fund balances (deficits)
Restricted for state aid street improvements
Restricted for redevelopment
Restricted for street improvements
Assigned for cable improvements
Assigned for park improvements
Assigned for equipment replacement
Assigned for street improvements
Assigned for capital improvements
Unassigned
Total fund balances (deficits)
Total liabilities, deferred inflows of
resources, and fund balances
CITY OF GOLDEN VALLEY
Nonmajor Capital Project Funds
Combining Balance Sheet
December 31, 2016
Street
Reconstruction Cable Park Capital
Building Capital Project Improvement Improvement
$ 919,151 $ 2,975,223 $ 518,111 $ 1,078,577
— 41,311
$ 919,151 $ 3,016,534 $ 518,111 $ 1,078,577
$ 1,076 $ 46,158 $ — $ —
2,827 139,408 313,772 —
30,125 — —
3,903 215,691 313,772 —
41,311 — —
2,217,261 — -
- 204,339 -
- 1,078,577
— 542,271 — —
915,248 — — —
915,248 2,759,532 204,339 1,078,577
$ 919,151 $ 3,016,534 $ 518,111 $ 1,078,577
-83-
North Wirth
Equipment State Aid HRA Capital No. 3 Hwy 55 West
Replacement Construction Project Tax Increment Tax Increment Totals
$ 3,456,928 $ 2,704,240 $ 103,856 $ 16,662 $ - $ 11,772,748
- 26,975 - - - 68,286
- 39,855 - 1,957 - 41,812
$ 3,456,928 $ 2,771,070 S 103,856 S 18,619 $ - $ 11,882,846
$ 1,532 $ 1,894 $ - $ - $ - $ 50,660
- 3,529 - - - 459,536
21,605 71 - - - 21,676
- - - 8,687 545 39,357
- - - 583 525 1,108
23,137 5,494 - 9,270 1,070 572,337
- 26,975 - - - 68,286
2,465,358 - - - 2,465,358
103,856 9,349 113,205
- - - 2,217,261
- - - 204,339
- - - - - 1,078,577
3,433,791 - - - - 3,433,791
- 273,243 - - - 815,514
- - - - 915,248
- - - - (1,070) (1,070)
3,433,791 2,738,601 103,856 9,349 (1,070) 11,242,223
$ 3,456,928 $ 2,771,070 $ 103,856 $ 18,619 $ - $ 11,882,846
-84-
CITY OF GOLDEN VALLEY
Nonmajor Capital Project Funds
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2016
Street
Reconstruction Cable Park Capital
Building Capital Project Improvement Improvement
Revenue
Tax increments
$ -
$ - $
- $
-
Special assessments
-
115,537
-
-
Intergovernmental revenue
-
-
-
25,000
Investment income
4,700
16,935
1,087
5,390
Other revenue
Miscellaneous
1,125
5,800
34,718
166,372
Total revenue
5,825
138,272
35,805
196,762
Expenditures
Capital outlay
Street
-
1,460,490
-
-
City buildings and grounds
784,944
-
-
462,907
Equipment
-
-
-
-
HRA projects
-
-
-
-
Total capital outlay
784,944
1,460,490
-
462,907
Debt service
Principal
-
-
-
-
Interest and fiscal charges
-
18,802
-
-
Total expenditures
784,944
1,479,292
-
462,907
Excess (deficiency) of revenue
over expenditures
(779,119)
(1,341,020)
35,805
(266,145)
Other financing sources
Sale of capital assets
-
-
-
-
Bonds issued
-
1,215,000
-
-
Premium on bonds issued
-
-
-
-
Transfers in
647,390
200,000
-
525,000
Total other financing sources
647,390
1,415,000
-
525,000
Net change in fund balances
(131,729)
73,980
35,805
258,855
Fund balances (deficits)
Beginning of year
1,046,977
2,685,552
168,534
819,722
End of year
$ 915,248
$ 2,759,532 $
204,339 $
1,078,577
-85-
-86-
North Wirth
Equipment
State Aid
HRA Capital
No. 3
Hwy 55 West
Replacement
Construction
Project
Tax Increment
Tax Increment
Totals
$ -
$ -
$ -
$ 24,727
$ -
$ 24,727
-
13,252
-
-
-
128,789
-
489,286
-
-
-
514,286
19,635
15,791
-
-
-
63,538
5,488
-
-
-
-
213,503
25,123
518,329
-
24,727
-
944,843
-
126,723
-
-
-
1,587,213
-
-
-
-
-
1,247,851
1,172,565
-
-
-
-
1,172,565
-
-
-
28,406
1,075
29,481
1,172,565
126,723
-
28,406
1,075
4,037,110
-
120,000
-
-
-
120,000
15,537
69,681
-
-
-
104,020
1,188,102
316,404
-
28,406
1,075
4,261,130
(1,162,979)
201,925
-
(3,679)
(1,075)
(3,316,287)
80,627
-
-
-
-
80,627
783,391
-
-
-
-
1,998,391
21,217
-
-
-
21,217
250,000
-
-
-
-
1,622,390
1,135,235
-
-
-
-
3,722,625
(27,744)
201,925
-
(3,679)
(1,075)
406,338
3,461,535
2,536,676
103,856
13,028
5
10,835,885
$ 3,433,791
$ 2,738,601
$ 103,856
$ 9,349
$ (1,070)
$ 11,242,223
-86-
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CITY OF GOLDEN VALLEY
General Fund
Schedule of Revenue - Budget and Actual
Year Ended December 31, 2016
(With Comparative Actual Amounts for the Year Ended December 31, 2015)
Intergovernmental revenue
Federal grants
- 18,359 18,359 16,672
2016
268,380 286,559 18,179 270,167
2015
- - - 31,205
Final
268,380 304,918 36,538 318,044
Over (Under)
120,600
Fire
Budget
Actual
Budget
Actual
Revenue
145,800
189,543
43,743
191,702
Taxes
395,100
370,709
(24,391)
378,917
Ad valorem
$ 14,278,810
$ 14,092,737
$ (186,073)
$ 13,360,590
Penalties and interest
-
84,204
84,204
41,247
Total taxes
14,278,810
14,176,941
(101,869)
13,401,837
Special assessments
10,000
10,496
496
16,198
Licenses and permits
Licenses
217,515
255,165
37,650
242,381
Permits
1,126,375
1,604,043
477,668
1,383,412
Total licenses and permits
1,343,890
1,859,208
515,318
1,625,793
Intergovernmental revenue
Federal grants
- 18,359 18,359 16,672
State grants
268,380 286,559 18,179 270,167
County
- - - 31,205
Total intergovernmental revenue
268,380 304,918 36,538 318,044
Charges for services
General government
19,000
36,042
17,042
34,136
Police
110,665
127,127
16,462
120,600
Fire
40,000
49,384
9,384
45,420
Physical development
145,800
189,543
43,743
191,702
Parks and recreation
395,100
370,709
(24,391)
378,917
Other funds
791,500
728,480
(63,020)
781,043
Total charges for services
1,502,065
1,501,285
(780)
1,551,818
Fines and forfeitures
320,425
283,483
(36,942)
354,066
Investment income
100,000
56,518
(43,482)
45,637
Otherrevenue
Rents 213,200
187,195
(26,005)
229,069
Miscellaneous 9,800
17,059
7,259
20,452
Total other revenue 223,000
204,254
(18,746)
249,521
Total revenue $ 18,046,570
$ 18,397,103
$ 350,533
$ 17,562,914
-87-
CITY OF GOLDEN VALLEY
General Fund
Schedule of Expenditures - Budget and Actual
Year Ended December 31, 2016
(With Comparative Actual Amounts for the Year Ended December 31, 2015)
Expenditures
General government
City Council
City manager
Legal service
Total general government
Administrative services
Casualty insurance
Public safety
Police
Fire
Total public safety
Physical development
Administration
Building operations
Engineering
Street maintenance
Park maintenance
Inspections
Planning
Total physical development
Parks and recreation
Administration
Community center
Recreation programs
Total parks and recreation
Total expenditures
2016
Actual
Final Personal Supplies and
Budget Services Services Capital Outlay
$ 322,960
$ 186,033
$ 136,367 $
-
798,260
683,669
78,482
-
150,000
138,215
1,271,220
1,007,917
214,849
-
1,869,995
931,570
880,975
-
305,000
-
154,842
-
5,671,180
4,474,935
774,804
7,231
1,290,210
1,003,809
242,276
-
6,961,390
5,478,744
1,017,080
7,231
298,755
275,254
15,123
-
532,790
14,623
501,756
9,850
783,470
379,002
309,517
-
1,611,865
828,586
671,207
-
1,137,895
815,338
306,776
-
777,690
631,135
104,320
-
353,800
319,251
7,143
-
5,496,265
3,263,189
1,915,842
9,850
705,660
585,644
84,130
5,693
81,095
58,975
21,201
-
374,995
137,791
184,598
-
1,161,750
782,410
289,929
5,693
$ 17,065,620
$ 11,463,830
$ 4,473,517 $
22,774
-88-
2015
Over (Under)
Total Budget Actual
$ 322,400
$ (560)
$ 334,923
762,151
(36,109)
694,947
138,215
(11,785)
156,441
1,222,766
(48,454)
1,186,311
1,812,545
(57,450)
1,712,183
154,842
(150,158)
169,213
5,256,970
(414,210)
4,915,267
1,246,085
(44,125)
1,146,396
6,503,055
(458,335)
6,061,663
290,377
(8,378)
259,423
526,229
(6,561)
546,903
688,519
(94,951)
698,285
1,499,793
(112,072)
1,274,314
1,122,114
(15,781)
1,077,091
735,455
(42,235)
654,772
326,394
(27,406)
279,858
5,188,881
(307,384)
4,790,646
675,467
(30,193)
682,885
80,176
(919)
72,905
322,389
(52,606)
336,408
1,078,032
(83,718)
1,092,198
$ 15,960,121 $ (1,105,499) $ 15,012,214
-89-
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RON 0 DI IR El 1L"A' iA [SIA Ilk"M
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.
bl
Assets
Current assets
Cash and temporary investments
Receivables
Accounts
Inventory
Total current assets
Noncurrent assets
Net pension asset - fire relief
Capital assets
Machinery and equipment
Less accumulated depreciation
Total noncurrent assets
Total assets
Deferred outflows of resources
Pension plan deferments - PERA
Pension plan deferments - fire relief
Total deferred outflows of resources
Total assets and deferred outflows
of resources
Liabilities
Current liabilities
Accounts payable
Accrued compensated absences - current
Deposits
Total current liabilities
Noncurrent liabilities
Accrued compensated absences
Net pension liability - PERA
Net OPEB obligation
Total noncurrent liabilities
Total liabilities
Deferred inflows of resources
Pension plan deferments - PERA
Pension plan deferments - fire relief
Total deferred inflows of resources
Net position
Net investment in capital assets
Restricted for fire relief pensions
Unrestricted
Total net position
Total liabilities, deferred inflows
of resources, and net position
CITY OF GOLDEN VALLEY
Internal Service Funds
Combining Statement of Net Position
December 31, 2016
Workers'
Payroll
Vehicle
Compensation
Benefits
Maintenance
Totals
$ 253,743
$ 1,791,727
$ 100,982
$ 2,146,452
-
8,056
-
8,056
103,410
103,410
253,743
1,799,783
204,392
2,257,918
-
1,701,716
-
1,701,716
134,844
134,844
(95,687)
(95,687)
-
1,701,716
39,157
1,740,873
253,743
3,501,499
243,549
3,998,791
-
12,915,314
-
12,915,314
-
410,869
-
410,869
-
13,326,183
-
13,326,183
$ 253,743
$ 16,827,682
$ 243,549
$ 17,324,974
$ -
$ 610
$ 22,297
$ 22,907
-
1,073,366
-
1,073,366
-
10,771
-
10,771
-
1,084,747
22,297
1,107,044
-
502,419
-
502,419
-
21,506,136
-
21,506,136
-
859,334
-
859,334
-
22,867,889
-
22,867,889
-
23,952,636
22,297
23,974,933
-
2,550,048
-
2,550,048
-
191,234
-
191,234
-
2,741,282
-
2,741,282
39,157
39,157
-
1,921,351
-
1,921,351
253,743
(11,787,587)
182,095
(11,351,749)
253,743
(9,866,236)
221,252
(9,391,241)
$ 253,743 $ 16,827,682 $ 243,549 $ 17,324,974
-91-
CITY OF GOLDEN VALLEY
Internal Service Funds
Combining Statement of Revenue, Expenses, and Changes in Net Position
Year Ended December 31, 2016
Operating revenue
Charges to other funds
Payroll benefits charged to employees
Total operating revenue
Operating expenses
Workers' compensation charges
Payroll benefits charges
Vehicle maintenance operations
Depreciation
Total operating expenses
Operating income (loss)
Nonoperating revenue
Intergovernmental revenue
Investment income
Other income
Total nonoperating revenue
Change in net position
Net position
Beginning of year
End of year
Workers' Payroll
Compensation Benefits
$ 326,000 $ 5,478,751
— 1,496,263
326,000 6,975,014
Vehicle
$ 344,743 $ 6,149,494
— 1,496,263
344,743 7,645,757
324,195
324,195
—
9,898,113
—
9,898,113
331,817
331,817
—
—
13,569
13,569
324,195
9,898,113
345,386
10,567,694
1,805
(2,923,099)
(643)
(2,921,937)
—
476,315
—
476,315
805
10,211
642
11,658
—
30
—
30
805
486,556
642
488,003
2,610
(2,436,543)
(1)
(2,433,934)
251,133
(7,429,693)
221,253
(6,957,307)
$ 253,743
$ (9,866,236) $
221,252
$ (9,391,241)
-92-
CITY OF GOLDEN VALLEY
Internal Service Funds
Combining Statement of Cash Flows
Year Ended December 31, 2016
Cash flows from operating activities
Receipts from customers and users
Receipts from interfund services provided
Paid to suppliers/service providers
Paid to employees
Net cash flows from operating activities
Cash flows from investing activities
Interest received on investments
Cash flows from noncapital financing activities
Intergovernmental revenue
Net increase in cash and temporary
investments/cash equivalents
Cash and temporary investments/cash equivalents
Beginning of year
End of year
Reconciliation of operating income (loss) to net
cash flows from operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities
Depreciation
Other income
Changes in assets, liabilities, and deferred outflows/inflows
Accounts receivable
Inventory
Prepaid items
Net pension asset - fire relief
Deferred outflows - pension plan deferments
Accounts payable
Deposits
Accrued compensated absences
Net pension liability - PERA
Net OPEB obligation
Deferred inflows - pension plan deferments
Workers'
Compensation
Payroll Vehicle
Benefits Maintenance Totals
$ -
$ 5,476,208
$ -
$ 5,476,208
326,000
1,496,263
344,743
2,167,006
(324,195)
(5,251,801)
(48,208)
(5,624,204)
-
(2,082,039)
(259,812)
(2,341,851)
1,805
(361,369)
36,723
(322,841)
805
10,211
642
11,658
-
476,315
-
476,315
2,610
125,157
37,365
165,132
251,133 1,666,570 63,617 1,981,320
$ 253,743 $ 1,791,727 $ 100,982 $ 2,146,452
$ 1,805 $ (2,923,099) $ (643) $ (2,921,937)
13,569 13,569
30 - 30
- (2,573)
- (2,573)
13,949 13,949
- 122,801
- 122,801
- 204,213
- 204,213
- (11,472,966)
- (11,472,966)
- 88
9,848 9,936
- 5,482
- 5,482
- 66,875
- 66,875
- 12,213,067
- 12,213,067
- 143,959
- 143,959
- 1,280,754
- 1,280,754
Net cash provided (used) by operating activities $ 1,805 $ (361,369) $ 36,723 $ (322,841)
-93-
OTHER CITY INFORMATION
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, 2016
Sources of funds
Tax increments received
Real estate sales
Interest earnings
Total sources of funds
Uses of funds
Land and building acquisition
Site preparation and improvements
Administrative costs
Interest and fiscal costs
Total uses of funds
Funds remaining (deficit)
Note: Real estate sales
Property purchased and sold to developers:
Purchaser/Developer Project Sale Price Cost
GVEC, LLC Business Center $ 523,431 $ 1,093,241
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.
-94-
Accounted for
Current
Amount
Budget
in Prior Years
Year
Remaining
$ 920,000
$ 259,776
$ 24,727
$ 635,497
575,000
523,431
—
51,569
—
3,910
—
(3,910)
1,495,000
787,117
24,727
683,156
—
132,424
28,406
(160,830)
1,000,000
621,135
—
378,865
—
16,058
—
(16,058)
495,000
4,472
—
490,528
1,495,000
774,089
28,406
692,505
$ —
$ 13,028
$ (3,679)
$ (9,349)
Note: Real estate sales
Property purchased and sold to developers:
Purchaser/Developer Project Sale Price Cost
GVEC, LLC Business Center $ 523,431 $ 1,093,241
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.
-94-
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, 2016
-95-
Accounted for
Current
Amount
Budget
in Prior Years
Year
Remaining
Sources of funds
Tax increments received
$ 8,814,808
$ —
$ —
$ 8,814,808
Interest earnings
—
5
—
(5)
Total sources of funds
8,814,808
5
—
8,814,803
Uses of funds
Site acquisition and improvements
4,545,891
—
1,075
4,544,816
Administrative costs
881,480
881,480
Interest and fiscal costs
3,387,437
3,387,437
Total uses of funds
8,814,808
—
1,075
8,813,733
Funds remaining (deficit)
$ —
$ 5
$ (1,075)
$ 1,070
-95-
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, 2016
-96-
Accounted for Current
Amount
Budget
in Prior Years Year
Remaining
Sources of funds
Tax increments received
$ 1,535,716
$ — $ —
$ 1,535,716
Interest earnings
—
— —
—
Total sources of funds
1,535,716
1,535,716
Uses of funds
Site acquisition and improvements
687,975
687,975
Administrative costs
171,571
171,571
Interest and fiscal costs
676,170
676,170
Total uses of funds
1,535,716
— —
1,535,716
Funds remaining (deficit)
$ —
-96-
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, 2016
-97-
Accounted for
Current
Amount
Budget
in Prior Years
Year
Remaining
Sources of funds
Tax increments received
$ 19,052,584
$ —
$ —
$ 19,052,584
Interest earnings
—
—
—
—
Total sources of funds
19,052,584
—
—
19,052,584
Uses of funds
Site improvements — utilities
7,913,693
—
1,000,000
6,913,693
Administrative costs
1,945,145
—
—
1,945,145
Interest and fiscal costs
9,193,746
—
22,083
9,171,663
Total uses of funds
19,052,584
—
1,022,083
18,030,501
Funds remaining (deficit)
$ —
$ —
$ (1,022,083)
$ 1,022,083
-97-
THIS PAGE INTENTIONALLY LEFT BLANK
STATISTICAL SECTION
(UNAUDITED)
STATISTICAL SECTION (UNAUDITED)
This part of the City of Golden Valley, Minnesota's (the City) Comprehensive Annual Financial Report (CAFR) 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.
Page
Contents:
Financial Trends 99
These schedules contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity 111
These schedules contain information to help the reader assess the City's most significant revenue source,
including the property tax and utility revenue.
Debt Capacity 116
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.
Demographic and Economic Information 124
These schedules offer demographic and economic indicators to help the reader understand the environment
within which the City's financial activities take place.
Operating Indicators 126
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.
Source: Unless otherwise noted, the information in these schedules is derived from the CAFR for the relevant year.
-98-
CITY OF GOLDEN VALLEY
Governmental activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -type activities
Net investment in capital assets
Unrestricted
Total business -type activities net position
Primary government
Net investment in capital assets
Restricted
Unrestricted
Total primary government net position
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Year
2007 2008 2009 2010
$ 21,062,593
$ 23,613,301
$ 24,388,008
$ 21,635,548
28,599,235
30,192,456
28,061,624
22,187,677
(11,098,272)
(7,377,599)
(3,510,363)
5,812,640
$ 38,563,556 $ 46,428,158 $ 48,939,269 $ 49,635,865
$ 20,786,526 $ 22,427,619 $ 23,564,184 $ 24,838,885
13,787,483 15,962,676 16,572,658 17,231,676
$ 34,574,009 $ 38,390,295 $ 40,136,842 $ 42,070,561
$ 41,849,119
$ 46,040,920
$ 47,952,192
$ 46,474,433
28,599,235
30,192,456
28,061,624
22,187,677
2,689,211
8,585,077
13,062,295
23,044,316
$ 73,137,565 $ 84,818,453 $ 89,076,111 $ 91,706,426
Note 1: The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard. Net position for previous years has not been restated.
Note 2: 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.
••
2011 2012 2013 2014 2015 2016
$
22,753,481
$
22,622,764
$
21,829,745
$
21,499,939
$
24,816,606
$
23,527,470
23,045,045
26,673,032
29,535,846
29,553,484
17,942,353
18,567,757
5,903,464
7,499,559
9,306,292
14,349,901
15,401,264
12,900,989
$
51,701,990
$
56,795,355
$
60,671,883
$
65,403,324
$
58,160,223
$
54,996,216
$
27,268,683
$
27,416,740
$
28,427,621
$
29,588,257
$
30,101,294
$
31,809,835
16,430,056
17,508,592
18,562,323
16,164,578
14,010,619
17,561,589
$
43,698,739
$
44,925,332
$
46,989,944
$
45,752,835
$
44,111,913
$
49,371,424
$
50,022,164
$
50,039,504
$
50,257,366
$
51,088,196
$
54,917,900
$
55,337,305
23,045,045
26,673,032
29,535,846
29,553,484
17,942,353
18,567,757
22,333,520
25,008,151
27,868,615
30,514,479
29,411,883
30,462,578
$ 95,400,729 $ 101,720,687 $ 107,661,827 $ 111,156,159 $ 102,272,136 $ 104,367,640
-100-
Expenses
Governmental activities
General government
Public safety
Physical development
Parks and recreation
Interest and fiscal charges
Total governmental activities expenses
Business -type activities
Water and sewer
Storm sewer
Golf course
Motor vehicle licensing
Recycling
Total business -type activities expenses
Total primary government expenses
Program revenues
Governmental activities
Charges for services
General government
Public safety
Physical development
Parks and recreation
Operating grants and contributions
Capital grants and contributions
Total governmental activities program
revenues
Business -type activities
Charges for services
Water and sewer
Storm sewer
Golf course
Motor vehicle licensing
Recycling
Operating grants and contributions
Capital grants and contributions
Total business -type activities program
revenues
CITY OF GOLDEN VALLEY
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
$ 30,053,748 $ 32,033,546 $ 33,693,253 $ 35,113,887
$ 217,961
$ 255,249
$ 264,357
Fiscal Year
2007
2008
2009
2010
394,146
335,906
352,630
337,146
$ 3,325,458
$ 3,265,940
$ 3,271,352
$ 3,801,269
5,763,034
6,091,866
6,298,431
6,585,990
6,330,917
8,282,504
8,322,099
9,864,540
1,292,912
1,331,180
1,476,771
1,338,155
3,560,215
3,329,662
3,544,117
3,272,726
20,272,536
22,301,152
22,912,770
24,862,680
6,310,133
6,038,783
6,952,047
6,561,335
1,114,087
1,313,173
1,299,813
1,239,080
1,797,055
1,819,557
1,770,491
1,736,551
387,613
420,911
409,032
423,423
172,324
139,970
349,100
290,818
9,781,212
9,732,394
10,780,483
10,251,207
$ 30,053,748 $ 32,033,546 $ 33,693,253 $ 35,113,887
$ 217,961
$ 255,249
$ 264,357
$ 273,318
1,728,325
1,827,820
1,194,484
1,311,914
394,146
335,906
352,630
337,146
314,502
348,536
340,072
379,356
306,055
285,576
294,902
410,767
3,093,771
3,288,594
1,097,097
1,831,662
6,054,760
6,341,681
3,543,542
4,544,163
7,268,146
7,428,721
7,638,314
7,391,493
2,233,211
2,245,005
2,265,937
2,279,840
1,742,650
1,766,714
1,719,611
1,676,136
624,381
598,635
534,559
531,074
221,449
221,261
220,829
220,809
123,701
76,039
139,432
177,601
427,353
846,164
56,081
-
12,640,891
13,182,539
12,574,763
12,276,953
Total primary government program revenues $ 18,695,651 $ 19,524,220 $ 16,118,305 $ 16,821,116
-101-
2011
2012
2013
2014
2015
2016
$ 3,319,661
$ 3,121,543
$ 2,914,823
$ 3,066,025
$ 11,327,689
$ 4,182,777
6,490,371
6,906,449
7,310,946
6,831,136
6,907,661
8,213,351
9,720,753
9,758,495
10,325,068
11,396,748
13,448,443
11,274,790
1,335,562
1,692,346
1,588,798
1,545,616
1,486,218
1,736,619
2,930,757
2,724,495
2,633,359
2,456,490
2,066,076
2,172,554
23,797,104
24,203,328
24,772,994
25,296,015
35,236,087
27,580,091
8,474,883
8,023,803
7,611,927
9,867,531
9,867,731
8,327,113
1,176,603
1,383,594
1,589,410
1,944,935
1,795,260
1,685,494
1,708,984
1,724,174
1,645,728
1,693,028
1,848,745
2,172,621
260,583
154,492
326,382
326,201
349,019
401,363
218,145
299,809
410,808
393,280
392,239
407,664
11,839,198
11,585,872
11,5 84,255
14,224,975
14,252,994
12,994,255
$ 35,636,302 $ 35,789,200 $ 36,357,249 $ 39,520,990 $ 49,489,081 $ 40,574,346
$ 277,901
$ 263,035
$ 279,725
$ 276,782
$ 263,205
$ 223,237
1,609,601
1,628,076
1,861,481
1,837,076
1,985,746
2,155,832
360,307
400,773
407,938
342,809
415,395
400,351
438,349
614,164
594,142
534,821
594,130
489,959
413,826
464,187
559,246
538,956
600,264
643,970
2,498,297
3,595,000
1,882,698
2,028,250
6,377,610
1,578,699
5,598,281
6,965,235
5,585,230
5,558,694
10,236,350
5,492,048
8,636,333
8,217,582
7,831,307
2,279,633
2,256,336
2,274,549
1,580,954
1,765,186
1,502, 897
138,936
92,626
304,424
266,858
276,190
276,099
463,650
128,893
495,451
191,686
32,162
852,075
13,558,050 12,768,975 13,536,802
7,751,250
2,278,128
1,543,151
347,382
323,184
701,605
8,266,107
2,281,125
2,071,141
395,718
331,630
209,831
8,814,629
2,241,536
2,106,472
457,275
378,934
167,557
1,561,135
12,944,700 13,555,552 15,727,538
$ 19,156,331 $ 19,734,210 $ 19,122,032 $ 18,503,394 $ 23,791,902 $ 21,219,586
(continued)
-102-
CITY OF GOLDEN VALLEY
Changes in Net Position (continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Net (expense) revenue
Governmental activities
Business -type activities
Total primary government net expense
General revenues and other changes in net position
Governmental activities
Property taxes
Franchise taxes
Unrestricted grants and contributions
Other general revenues
Investment earnings
Gain on sale of capital assets
Transfers
Total governmental activities
Business -type activities
Franchise taxes
Other general revenues
Investment earnings
Transfers
Total business -type activities
Total primary government
Changes in net position
Governmental activities
Business -type activities
Total primary government
Fiscal Year
2007 2008 2009 2010
$ (14,217,776) $ (15,959,471) $ (19,369,228) $ (20,318,517)
2,859,679 3,450,145 1,794,280 2,025,746
$ (11,358,097) $ (12,509,326) $ (17,574,948) $ (18,292,771)
$ 17,385,413 $ 19,464,163 $ 20,727,498 $ 20,143,891
27,386
27,385
13,693
27,386
557,955
498,523
263,702
350,183
1,771,384
1,328,642
552,835
250,723
18,597
54,025
55,611
44,330
175,000
175,000
267,000
198,600
19,935,735
21,547,738
21,880,339
21,015,113
59,898
5,330
615,500 541,141
219,267 101,243
(175,000) (175,000)
(267,000) (198,600)
500,398 366,141
(47,733) (92,027)
$ 20,436,133 $ 21,913,879 $ 21,832,606 $ 20,923,086
$ 5,717,959 $ 5,588,267 $ 2,511,111 $ 696,596
3,360,077 3,816,286 1,746,547 1,933,719
$ 9,078,036 $ 9,404,553 $ 4,257,658 $ 2,630,315
Note: The City implemented GASB Statement No. 65 in 2012. Change in net position for 2011 was restated for the effect of
implementing this standard. Change in net position for previous years has not been restated.
-103-
2011 2012 2013 2014 2015 2016
$ (18,198,823) $ (17,238,093) $ (19,187,764) $ (19,737,321) $ (24,999,737) $ (22,088,043)
1,718,852 1,183,103 1,952,547 (1,280,275) (697,442) 2,733,283
$ (16,479,971) $ (16,054,990) $ (17,235,217) $ (21,017,596) $ (25,697,179) $ (19,354,760)
$ 19,752,048
$ 20,946,972
$ 21,757,173
$ 22,616,003
$ 21,934,817
$ 19,473,750
581,600
621,585
904,928
1,048,227
1,028,368
402,017
27,386
-
-
-
-
-
336,139
353,033
338,245
286,108
372,590
347,543
300,813
214,493
112,817
347,197
221,237
313,888
156,161
76,852
24,735
71,227
18,337
56,838
198,600
118,523
(73,606)
100,000
100,000
(1,670,000)
21,352,747
22,331,458
23,064,292
24,468,762
23,675,349
18,924,036
-
-
-
-
-
700,000
558
65,978
-
-
-
-
142,204
96,035
38,459
142,866
122,591
156,228
(198,600)
(118,523)
73,606
(100,000)
(100,000)
1,670,000
(55,838)
43,490
112,065
42,866
22,591
2,526,228
$ 21,296,909 $ 22,374,948 $ 23,176,357 $ 24,511,628 $ 23,697,940 $ 21,450,264
$ 3,153,924 $ 5,093,365 $ 3,876,528 $ 4,731,441 $ (1,324,388) $ (3,164,007)
1,663,014 1,226,593 2,064,612 (1,237,409) (674,851) 5,259,511
$ 4,816,938 $ 6,319,958 $ 5,941,140 $ 3,494,032 $ (1,999,239) $ 2,095,504
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Fiscal Year
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CITY OF GOLDEN VALLEY
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Ad Valorem
Property Taxes
$ 13,735,821
14,877,502
15,337,158
15,901,115
15,807,735
16,219,048
16,922,610
17,431,741
21,911,378
19,449,023
Tax Increments
$ 3,649,592
4,586,661
5,390,340
4,242,776
3,944,313
4,627,924
4,834,563
5,184,262
23,439
24,727
-105-
Franchise Tax
581,600
621,585
904,928
1,048,227
1,028,368
402,017
Total
$ 17,385,413
19,464,163
20,727,498
20,143,891
20,333,648
21,468,557
22,662,101
23,664,230
22,963,185
19,875,767
General Fund
Reserved
Unreserved
Nonspendable
Assigned
Unassigned
Total General Fund
All other governmental funds
Reserved
Unreserved, reported in
Special revenue funds
Capital project funds
Debt service funds
Nonspendable
Restricted
Committed
Assigned
Unassigned, reported in
Capital project funds
Total all other governmental funds
CITY OF GOLDEN VALLEY
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Fiscal Year
2007 2008 2009 2010
$ — $ — $ — $ 90,000
8,807,130 8,894,990 8,985,030 8,913,423
$ 8,807,130 $ 8,894,990 $ 8,985,030 $ 9,003,423
$ 1,021,281 $ 1,795,677
115,395 145,519
12, 883,682 14,3 04,072
12,930,925 13,106,172
$ 13,598,736 $ 9,673,542
159,243 183,065
14,296,961 14,216, 671
14,391,151 12,624,401
$ 26,951,283 $ 29,351,440 $ 42,446,091 $ 36,697,679
Note: The City implemented GASB Statement No. 54 in 2011, which changed fund balance classifications. Fund balances
for previous years have not been restated.
-106-
2011 2012 2013 2014 2015 2016
-107-
45,000
1,256
7,617
18,822
1,778,352
1,560,000
1,500,000
1,500,000
2,000,000
2,000,000
7,395,646
7,756,057
8,207,985
8,640,108
8,719,447
8,954,274
$
9,218,998
$
9,316,057
$
9,707,985
$
10,141,364
$
10,727,064
$
10,973,096
-
-
-
-
285
-
29,472,220
33,693,776
43,287,123
47,308,126
33,222,298
44,457,090
928,337
687,458
718,723
743,633
202,270
208,846
7,345,999
8,106,763
7,032,562
7,224,030
11,357,732
11,702,718
-
-
(41,288)
(1,023,153)
$
37,746,556
$
42,487,997
$
51,038,408
$
55,275,789
$
44,741,297
$
55,345,501
-107-
CITY OF GOLDEN VALLEY
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Excess of revenues
over (under) expenditures (5,580,391) (5,270,428) (6,020,487) (5,415,300)
Other financing sources (uses)
Fiscal Year
Sale of capital assets
2007
2008
2009
2010
Revenues
7,395,000
7,430,000
8,055,000
4,530,000
Taxes
$ 13,739,116
$ 14,842,187
$ 15,316,495
$ 15,760,353
Tax increments
3,652,563
4,663,365
5,322,240
4,344,739
Special assessments
1,469,984
1,693,632
1,781,804
1,415,935
Franchise taxes
-
-
-
-
Licenses and permits
1,204,750
1,432,351
839,306
872,669
Intergovernmental
2,085,068
417,463
741,496
643,328
Charges for services
1,832,666
1,769,064
1,808,325
1,722,697
Fines and forfeits
253,594
223,317
210,181
284,600
Investment income
1,585,067
1,195,453
510,028
236,086
Other revenue
706,234
681,185
555,088
678,249
Total revenues
26,529,042
26,918,017
27,084,963
25,958,656
Expenditures
General government
1,329,568
1,322,117
1,377,347
1,774,439
Administrative services
1,325,111
1,374,942
1,423,084
1,460,063
Casualty insurance
300,489
214,600
223,209
277,016
Public safety
5,486,793
5,722,290
5,824,971
5,879,957
Physical development
3,710,000
3,853,075
3,854,331
3,732,546
Parks and recreation
971,222
1,066,232
1,039,353
1,033,593
Capital outlay- not capitalized
609,761
822,165
420,753
1,432,608
Construction/acquisition of capital assets
8,520,178
7,519,949
8,336,626
4,646,495
Debt service
Principal retirement
6,515,000
6,930,000
7,085,000
7,620,000
Interest and fiscal charges
3,341,311
3,363,075
3,520,776
3,517,239
Total expenditures
32,109,433
32,188,445
33,105,450
31,373,956
Excess of revenues
over (under) expenditures (5,580,391) (5,270,428) (6,020,487) (5,415,300)
Other financing sources (uses)
Sale of capital assets
47,766
72,915
90,075
82,420
Bonds issued
7,395,000
7,430,000
8,055,000
4,530,000
Refunding bonds issued
-
-
10,345,000
-
Premiums (discounts) on debt issues
30,422
80,530
448,103
109,261
Payments to refunded bond escrow agent
-
-
-
(4,935,000)
Transfers in
5,928,624
6,177,000
6,290,970
4,650,385
Transfers (out)
(5,753,624)
(6,002,000)
(6,023,970)
(4,751,785)
Total other financing sources (uses)
7,648,188
7,758,445
19,205,178
(314,719)
Net change in fund balances $ 2,067,797 $ 2,488,017 $ 13,184,691 $ (5,730,019)
Debt service as a percentage of noncapital
expenditures 41.8% 41.7% 42.8`%, 41.7%
-108-
2011
2012
2013
2014
2015
2016
$ 15,791,136
$ 16,378,425
$ 16,847,769
$ 17,334,800
$ 21,874,958
$ 19,539,516
3,993,985
4,627,924
4,834,563
5,184,262
23,439
24,727
1,389,200
1,273,820
1,223,120
1,217,205
1,060,839
806,891
581,600
621,585
904,928
1,048,227
1,028,368
402,017
1,161,906
1,223,848
1,496,453
1,479,304
1,626,113
1,859,208
951,285
3,452,180
984,620
1,410,427
4,717,848
1,554,964
1,631,110
1,876,117
1,889,478
1,718,592
1,607,143
1,544,898
303,908
351,413
366,059
310,318
354,066
283,483
281,770
201,966
107,763
328,554
209,866
302,230
637,606
617,366
650,750
716,133
879,395
727,904
26,723,506
30,624,644
29,305,503
30,747,822
33,382,035
27,045,838
1,379,620
1,297,470
1,268,041
1,310,190
9,340,987
1,299,871
1,460,704
1,513,689
1,558,386
1,682,784
1,712,183
1,812,545
255,536
237,152
222,559
240,918
169,213
154,842
6,010,214
6,462,507
6,594,376
6,156,396
6,116,997
6,563,064
3,901,808
4,083,857
4,142,979
5,051,206
4,790,646
5,188,881
1,068,002
1,183, 579
1,183,263
1,028,809
1,092,198
1,078,032
1,049,696
1,003,343
1,575,739
1,779,425
3,943,954
1,262,482
3,659,158
5,533,344
4,623,106
5,043,790
8,312,307
10,192,081
6,235,000 5,185,000 6,295,000 8,720,000 9,320,000 4,960,000
3,110,626 2,944,445 2,833,093 2,695,660 2,405,710 2,305,673
28,130,364 29,444,386 30,296,542 33,709,178 47,204,195 34,817,471
(1,406,858) 1,180,258 (991,039) (2,961,356) (13,822,160) (7,771,633)
236,593
83,669
80,875
222,432
53,442
80,627
2,495,000
2,300,000
2,485,000
3,085,000
2,670,000
25,130,000
4,870,000
5,960,000
9,100,000
3,950,000
6,600,000
-
291,117
166,050
452,503
274,684
164,926
1,026,242
(5,420,000)
(4,970,000)
(2,085,000)
-
(5,715,000)
(6,945,000)
3,402,570
4,448,233
6,448,710
6,545,710
5,742,041
2,551,950
(3,203,970)
(4,329,710)
(6,548,710)
(6,445,710)
(5,642,041)
(3,221,950)
2,671,310
3,658,242
9,933,378
7,632,116
3,873,368
18,621,869
$ 1,264,452 $ 4,838,500 $ 8,942,339 $ 4,670,760 $ (9,948,792) $ 10,850,236
38.2% 34.0% 35.6% 39.8% 30.1% 29.5%
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Fiscal Year
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CITY OF GOLDEN VALLEY
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Ad Valorem
Property Tax
$ 13,739,116
14,842,187
15,316,495
15,760,353
15,791,136
16,378,425
16,847,769
17,334,800
21,874,958
19,539,516
Tax Increments
$ 3,652,563
4,663,365
5,322,240
4,344,739
3,993,985
4,627,924
4,834,563
5,184,262
23,439
24,727
-110-
Franchise Tax
581,600
621,585
904,928
1,048,227
1,028,368
402,017
Total
$ 17,391,679
19,505,552
20,638,735
20,105,092
20,366,721
21,627,934
22,587,260
23,567,289
22,926,765
19,966,260
CITY OF GOLDEN VALLEY
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
(1) 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.
Source: Hennepin County
-111-
Tax Capacities (1)
Net Decrease
Levy Collectible
From Fiscal
Decrease From
in Fiscal Year
Real Property
Personal Property
Disparities
Tax Increments
2007
$ 40,662,398
$ 326,724
$ (5,000,474)
$ (3,429,711)
2008
43,508,495
302,601
(5,766,544)
(4,303,310)
2009
44,352,919
294,419
(6,586,685)
(4,739,865)
2010
42,049,838
284,789
(6,796,278)
(3,536,203)
2011
38,371,218
311,502
(6,220,733)
(3,227,508)
2012
36,478,494
320,766
(5,875,187)
(3,242,617)
2013
35,693,380
416,456
(5,460,857)
(3,275,801)
2014
35,543,286
413,722
(5,888,222)
(3,352,209)
2015
37,743,877
423,575
(5,994,022)
(20,214)
2016
40,233,072
433,290
(5,880,892)
(21,325)
(1) 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.
Source: Hennepin County
-111-
Applied
Tax Capacity
—
$ 32,558,937
33,741,242
33,320,788
32,002,146
29,234,479
27,681,456
27,373,178
26,716,577
32,153,216
34,764,145
Total City Tax
Capacity
Rate Applied
41.28
42.99
45.91
48.20
53.06
55.80
58.21
61.84
54.63
54.45
Estimated Actual
Taxable Value
$ 3,213,702,600
3,400,157,300
3,425,714,700
3,274,263,500
3,004,908,600
2,829,369,027
2,744,389,240
2,719,232,050
2,934,477,667
3,097,563,064
-112-
Assessed
Value as a
Percentage of
Actual Value
1.01 %
0.99
0.97
0.98
0.97
0.98
1.00
0.98
1.10
1.12
(1)
(2)
CITY OF GOLDEN VALLEY
Property Tax Rates (1)
Direct and Overlapping (2) Governments
Last Ten Fiscal Years
For the City/ISD No. 281
V, ---
For the City/ISD No. 270
Direct Rates
Overlapping Rates
Hennepin
General Levy Debt Levy City Total County ISD No. 270
Total Direct
and
Special Overlapping
Districts Rates
2007
32.16
Direct Rates
41.28
39.11
Overlapping Rates
7.45
106.86
2008
33.13
9.86
42.99
38.57
19.22
8.05
Total Direct
2009
34.85
11.06
45.91
40.41
20.08
7.69
and
2010
36.94
11.26
48.20
Hennepin
23.05
Special
Overlapping
Year
General Levy
Debt Levy
City Total
County
ISD No. 281
Districts
Rates
2007
32.16
9.12
41.28
39.11
28.75
7.45
116.59
2008
33.13
9.86
42.99
38.57
27.24
8.05
116.85
2009
34.85
11.06
45.91
40.41
27.21
7.69
121.22
2010
36.94
11.26
48.20
42.64
28.62
8.83
128.29
2011
40.65
12.41
53.06
45.84
34.39
9.87
143.16
2012
41.82
13.98
55.80
48.23
32.81
10.14
146.98
2013
43.00
15.21
58.21
49.46
32.35
10.93
150.95
2014
45.51
16.33
61.84
49.96
34.78
11.30
157.88
2015
40.46
14.17
54.63
46.40
33.22
10.56
144.81
2016
39.72
14.73
54.45
45.36
33.83
10.43
144.07
V, ---
For the City/ISD No. 270
Direct Rates
Overlapping Rates
Hennepin
General Levy Debt Levy City Total County ISD No. 270
Total Direct
and
Special Overlapping
Districts Rates
2007
32.16
9.12
41.28
39.11
19.02
7.45
106.86
2008
33.13
9.86
42.99
38.57
19.22
8.05
108.83
2009
34.85
11.06
45.91
40.41
20.08
7.69
114.09
2010
36.94
11.26
48.20
42.64
23.05
8.83
122.72
2011
40.65
12.41
53.06
45.84
26.46
9.87
135.23
2012
41.82
13.98
55.80
48.23
29.27
10.14
143.44
2013
43.00
15.21
58.21
49.46
29.73
10.93
148.33
2014
45.51
16.33
61.84
49.96
32.36
11.30
155.46
2015
40.46
14.17
54.63
46.40
30.34
10.56
141.93
2016
39.72
14.73
54.45
45.36
28.51
10.43
138.75
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.
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).
Source: Hennepin County
-113-
CITY OF GOLDEN VALLEY
Principal Property Taxpayers
Current Year and Nine Years Ago
Source: Hennepin County
-114-
2016
2007
Percentage of
Percentage of
Net Tax
Applied Tax
Net Tax
Applied Tax
Taxpayer
Capacity
Rank
Capacity
Capacity
Rank
Capacity
Allianz Life Insurance Company
$ 1,847,330
1
5.3 %
$ 1,051,720
2
3.2 %
General Mills, Inc.
1,630,320
2
4.7
2,363,260
1
7.3
DRA Advisors, LLC
1,403,950
3
4.0
Golden Jack, LLC
949,718
4
2.7
515,040
5
1.6
Menards, Inc.
495,750
5
1.4
United Health Care
402,130
6
1.2
554,420
4
1.7
Honeywell Incorporated
314,750
7
0.9
314,040
8
1.0
TCA Real Estate, LLC
240,210
8
0.7
The Luther Company, LLP
229,330
9
0.7
North Wirth Associates, LLP
221,610
10
0.6
Teacher's Insurance and Annuity
909,020
3
2.8
Hines RIET
390,520
6
1.2
Lupient Enterprises
377,180
7
1.2
Valley Creek Development, LLC
313,800
9
1.0
Tennant Company
283,420
10
0.9
Total
$ 7,735,098
22.3 %
$ 7,072,420
21.7 %
Source: Hennepin County
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CITY OF GOLDEN VALLEY
Property Tax Levies and Collections (1)
Last Ten Fiscal Years
Collected Within the
Fiscal Year Total Tax Fiscal Year of the Levy Collections in Total Collections to Date
Ended
Levy for
Percentage
Subsequent
December 31,
Fiscal Year (2)
Amount (3)
of Levy
Years (4)
Amount
2007
$ 14,099,021
$ 13,956,573
99.0 %
$ 142,448
$ 14,099,021
2008
15,192,449
15,039,110
99.0
153,339
15,192,449
2009
15,980,242
15,801,948
98.9
178,294
15,980,242
2010
16,306,687
16,084,726
98.6
221,961
16,306,687
2011
16,379,567
16,190,773
98.9
188,794
16,379,567
2012
16,395,177
16,274,052
99.3
121,125
16,395,177
2013
16,932,407
16,777,814
99.1
139,851
16,917,665
2014
17,403,839
17,242,324
99.1
111,188
17,353,512
2015
18,546,364
18,391,561
99.2
100,061
18,491,622
2016
19,603,886
19,511,104
99.5
—
19,511,104
(1) Does not include tax increments levied and collected.
(2) Total levy is net of current year cancellations and abatements.
(3) Total tax levy and current tax collections include state paid tax credits.
(4) Includes county adjustments for prior year over collections, cancellations, and abatements.
-115-
Percentage
of Levy
100.0 %
100.0
100.0
100.0
100.0
100.0
99.9
99.7
99.7
99.5
Fiscal Year
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
CITY OF GOLDEN VALLEY
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities
Special Tax Street Certificates Tax Lease
Assessment Increment Reconstruction of Abatement State -Aid Revenue
Bonds Bonds Bonds Indebtedness Bonds Street Bonds Bonds
$ 44,000,000
$ 24,190,000 $
47,610,000
21,410,000
62,125,000
18,580,000
58,205,000
14,940,000
56,640,000
12,735,000
56,350,000
11,565,000
62,230,000
9,290,000
65,320,000
4,935,000
64,860,000
—
55,455,000
—
— $ 2,120,000
$ 4,045,000
$ 2,560,000 $ —
— 2,195,000
3,725,000
2,475,000 —
— 2,235,000
3,405,000
2,385,000 —
— 2,190,000
3,080,000
2,290,000 —
— 2,100,000
2,750,000
2,190,000 —
— 2,095,000
2,420,000
2,090,000 —
— 2,145,000
2,075,000
1,985,000 —
— 2,205,000
1,705,000
1,875,000 —
— 2,295,000
1,360,000
1,760,000 —
5,630,000 2,350,000
1,015,000
1,640,000 17,410,000
(1) See the Schedule of Demographic and Economic Statistics for personal income and population data.
Note: Details regarding the City's outstanding debt can be found in the notes to basic financial statements.
-116-
-117-
Business -Type
Activities
Net
Net
Percentage
Premiums
Utility
Premiums
Total Primary
of Personal
(Discounts)
Total
Revenue Bonds
(Discounts)
Total
Government
Income (1)
Per Capita (1)
$ 117,714 $
77,032,714
$ 4,285,000
$ —
$ 4,285,000
$ 81,317,714
7.55 %
$ 3,994
175,490
77,590,490
4,020,000
—
4,020,000
81,610,490
7.12
4,015
562,329
89,292,329
3,750,000
—
3,750,000
93,042,329
8.10
4,581
590,508
81,295,508
3,470,000
—
3,470,000
84,765,508
7.70
4,161
785,719
77,200,719
3,175,000
—
3,175,000
80,375,719
7.16
3,935
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
4,087
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CITY OF GOLDEN VALLEY
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Total
63,984,075
64,308,828
63,660,779
63,168,819
60,774,830
56,857,734
50,778,009
44,611,161
43,434,795
63,965,505
Percentage of
Estimated Actual
Taxable Value
of Property (3) Per Capita (4)
1.99 % $ 3,143
1.89
3,158
Less Amounts
3,132
General
Restricted for
2.02
Obligation
Repaying
Fiscal Year
Bonds (1)
Principal (2)
1.64
2,146
2007
$ 77,032,714
$ 12,930,925 $
2008
77,590,490
13,106,172
2009
89,292,329
25,069,221
2010
81,295,508
18,126,689
2011
77,200,719
16,425,889
2012
75,339,122
18,481,388
2013
78,841,249
28,063,240
2014
77,261,767
32,650,606
2015
71,475,577
28,040,782
2016
85,543,531
21,578,026
Total
63,984,075
64,308,828
63,660,779
63,168,819
60,774,830
56,857,734
50,778,009
44,611,161
43,434,795
63,965,505
Percentage of
Estimated Actual
Taxable Value
of Property (3) Per Capita (4)
1.99 % $ 3,143
1.89
3,158
1.86
3,132
1.93
3,101
2.02
2,975
2.01
2,754
1.85
2,455
1.64
2,146
1.48 2,014
2.07 2,965
(1) 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.
(2) 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.
(3) See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for property value data.
(4) Population data can be found in the Schedule of Demographic and Economic Statistics.
Note: Details regarding the City's outstanding debt can be found in the notes to basic financial statements.
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CITY OF GOLDEN VALLEY
Direct and Overlapping Governmental Activities Debt
as of December 31, 2016
Estimated
Estimated
Debt
Percentage
Share of
Governmental Unit
Outstanding (1)
Applicable (1)
Overlapping Debt
Direct debt
City of Golden Valley
$ 85,543,531
100.00 %
$ 85,543,531
Overlapping debt
ISD No. 270, Hopkins
135,244,990
18.83
25,466,632
ISD No. 281, Robbinsdale
206,354,438
19.36
39,950,219
ISD No. 283, St. Louis Park
37,433,271
0.03
11,230
Hennepin County
811,375,883
2.32
18,823,920
Hennepin Suburban Park District
47,787,952
3.23
1,543,551
Hennepin Regional RR Authority
32,848,204
3.23
1,060,997
Metropolitan Council
38,874,706
1.18
458,722
Total overlapping debt
$ 1,309,919,444
87,315,271
Total direct and overlapping debt
$ 172,858,802
(1) Special assessment, tax abatement, 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.
Note: 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.
Source: Hennepin County Taxpayer Services
-119-
Debt limit
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
CITY OF GOLDEN VALLEY
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
2007 2008 2009 2010
$ 64,274,052
$ 102,004,719
$ 102,771,441
$ 98,227,905
1,911,054
1,964,316
1,987,568
1,918,389
$ 62,362,998
$ 100,040,403
$ 100,783,873
$ 96,309,516
2.97%
1.93%
1.93%
1.95%
Note: Under state finance law, the City's outstanding general obligation debt should not exceed 3 percent (2 percent for
years prior to 2008) 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.
-120-
2011 2012 2013 2014 2015 2016
$ 90,147,258
$ 84,881,071 $ 82,331,677 $ 81,576,962
$ 88,034,330
$ 92,926,892
1,793,550
1,784,770 2,927,363 2,833,906
1,712,141
4,682,733
$ 88,353,708
$ 83,096,301 $ 79,404,314 $ 78,743,056
$ 86,322,189
$ 88,244,159
1.99%
2.10% 3.56% 3.47%
1.94%
5.04%
Legal Debt Margin Calculation for Fiscal Year 2016
Market value
$3,097,563,064
Debt limit (3% of market value)
92,926,892
Total bonded debt
$ 86,080,000
Less
Debt not payable primarily from tax levies
Special assessment bonds
55,455,000
Tax abatement bonds
2,350,000
State -aid street bonds
1,015,000
Street reconstruction bonds
1,640,000
Lease revenue bonds
17,410,000
Utility revenue bonds
2,580,000
Fund balances available for tax supported debt
947,267
Total net debt applicable to limit
4,682,733
Legal debt margin
$ 88,244,159
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CITY OF GOLDEN VALLEY
Pledged Revenue Coverage
Last Ten Fiscal Years
(1) Utility revenue bonds, payable from the Storm Sewer Utility Fund.
(2) 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.
(3) 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.
(4) Excludes principal refunded from the proceeds of refunding bond issues.
Note: Details regarding the City's outstanding debt can be found in the notes to basic financial statements. Gross revenue
includes investment earnings. Operating expenses do not include interest.
-122-
Revenue Bonds (1)
Less Operating
Net Available
Debt Service
Fiscal Year
Gross Revenue
Expenses
Revenue
Principal
Interest
2007
$ 2,962,313
$ 945,877
$ 2,016,436
$ 290,000 $
186,387
2008
3,299,370
1,122,250
2,177,120
265,000
175,562
2009
2,350,982
1,121,715
1,229,267
270,000
165,227
2010
2,321,983
1,074,191
1,247,792
280,000
154,595
2011
2,755,829
1,037,944
1,717,885
295,000
140,299
2012
2,384,379
1,269,110
1,115,269
305,000
128,123
2013
2,502,536
1,470,273
1,032,263
320,000
118,749
2014
2,483,612
1,871,604
612,008
1,510,000 (2)
94,968
2015
2,455,263
1,748,165
707,098
130,000
41,718
2016
2,406,073
1,567,226
838,847
910,000 (3)
90,099
(1) Utility revenue bonds, payable from the Storm Sewer Utility Fund.
(2) 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.
(3) 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.
(4) Excludes principal refunded from the proceeds of refunding bond issues.
Note: Details regarding the City's outstanding debt can be found in the notes to basic financial statements. Gross revenue
includes investment earnings. Operating expenses do not include interest.
-122-
-123-
Special Assessment Bonds
Special
Assessment
Debt Service
Coverage
Collections
Principal (4)
Interest
Coverage
4.23
$ 1,329,952
$ 3,085,000 $
1,785,736
0.27
4.94
1,594,627
3,070,000
1,846,084
0.32
2.82
1,733,879
3,135,000
2,008,648
0.34
2.87
1,364,381
2,830,000
2,343,345
0.26
3.95
1,334,959
2,855,000
2,051,651
0.27
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
-123-
CITY OF GOLDEN VALLEY
Demographic and Economic Statistics
Last Ten Fiscal Years
Sources:
(1) Metropolitan Council — Regional Statistics and Data except for 2016 — City estimate.
(2) 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.
(3) 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 for.
(4) School districts.
(5) Minnesota Department of Economic Security — Hennepin County.
-124-
Per Capita
Fiscal
Personal
Personal
School
Unemployment
Year
Population (1)
Income (2)
Income (3)
Enrollment (4)
Rate (5)
2007
20,362
$ 1,076,881,275
$ 52,905
2,295
4.2 %
2008
20,326
1,145,973,360
56,280
2,163
5.9
2009
20,312
1,148,927,968
56,564
2,147
6.7
2010
20,371
1,100,196,968
54,008
2,111
6.1
2011
20,427
1,122,443,223
54,949
2,137
5.2
2012
20,642
1,186,419,592
57,476
2,078
4.8
2013
20,683
1,218,187,334
58,898
2,088
4.1
2014
20,790
1,259,894,790
60,601
2,074
3.2
2015
21,571
1,378,408,471
63,901
2,115
3.2
2016
21,571
1,407,097,901
65,231
1,994
3.6
Sources:
(1) Metropolitan Council — Regional Statistics and Data except for 2016 — City estimate.
(2) 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.
(3) 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 for.
(4) School districts.
(5) Minnesota Department of Economic Security — Hennepin County.
-124-
CITY OF GOLDEN VALLEY
Principal Employers
Current Year and Nine Years Ago
Source: Metropolitan Council — Regional Statistics and Data
-125-
2016
2007
Percentage
Percentage
of Total City
of Total City
Employer
Employees
Rank
Employment
Employees
Rank
Employment
General Mills, Inc.
5,500
1
16.2 %
3,000
1
9.9 %
Allianz Life Insurance Company
2,100
2
6.2
2,500
2
8.3
OptumHealth
1,700
3
5.0
Honeywell Incorporated
1,350
4
4.0
2,500
3
8.3
G.H. Tennant Company
820
5
2.4
1,100
4
3.6
M.A. Mortenson
600
6
1.8
Courage Center
585
7
1.7
550
6
1.8
Breck School
439
8
1.3
300
8
1.0
Lubrication Technologies
350
9
1.0
—
—
—
Preferred One
335
10
1.0
—
—
—
United Health Care
—
—
—
745
5
2.5
McKesson Corporation
—
—
—
335
7
1.1
Lupient Automobile Group
—
—
—
300
9
1.0
Liberty Carton
—
270
10
0.9
Total
13,779
40.7 %
11,600
38.4 %
Source: Metropolitan Council — Regional Statistics and Data
-125-
CITY OF GOLDEN VALLEY
Full -Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
Function
General government
Public safety
Physical development
Parks and recreation
Water and sewer
Storm sewer
Golf course
Motor vehicle licensing
Total
Source: Various city departments
Full -Time Equivalent Employees as of Year Ended December 31,
?007 ?nnR M09 M i n
16.10
18.10
18.10
18.10
50.25
52.25
51.25
52.25
31.91
31.91
31.91
30.91
5.80
5.80
5.80
5.80
10.59
10.59
10.59
10.59
1.00
1.00
1.00
1.00
7.00
7.00
7.00
7.00
5.75
5.75
5.00
5.00
128.40
132.40
130.65
130.65
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I)nl 1 )()1 1) IMM 2 2nl A 7nl c IMI L
17.60
17.10
23.10
23.10
23.50
23.50
50.75
50.75
44.75
47.25
47.25
47.25
29.91
30.66
31.66
30.66
29.66
29.66
5.50
5.50
5.50
5.50
5.50
5.50
10.59
11.34
12.34
12.34
12.34
12.34
1.00
1.00
1.00
1.00
7.00
7.00
7.00
7.00
7.00
7.00
5.00
4.00
4.00
4.00
4.00
4.00
127.35
126.35
128.35
130.85
130.25
130.25
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CITY OF GOLDEN VALLEY
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
Source: Various city departments
-128-
2007
2008
2009
2010
Function
Police
Adult arrests
1,079
1,025
1,025
1,338
Juvenile arrests
113
106
106
80
Citations written
2,890
2,847
2,847
3,184
Fire
Number of calls answered
754
693
693
715
Highways and streets
Street resurfacing (miles)
3.8
4.2
4.2
2.7
Water
New (removed) connections
(150)
l 1
11
(7)
Water main breaks
18
18
18
17
Average daily consumption
(thousands of gallons)
2,816
2,759
2,759
2,433
Source: Various city departments
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2011 2012 2013 2014 2015 2016
1,177
1,399
1,103
905
1,025
1,027
107
70
61
38
33
20
5,036
3,828
3,524
3,488
3,138
2,659
726
648
797
631
711
747
1.1
1.2
1.0
1.2
1.2
0.5
1
(5)
2
8
(1)
9
27
26
10
30
28
15
2,561
2,765
2,518
2,213
2,156
2,106
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CITY OF GOLDEN VALLEY
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
Source: Various city departments
-130-
2007
2008
2009
2010
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
1,830
1,830
1,830
1,830
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
7,319
7,139
7,150
7,143
Sewer
Connections
7,152
7,164
7,172
7,175
Source: Various city departments
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2011 2012 2013 2014 2015 2016
1
1
1
1
1
1
8
8
8
8
8
8
3
3
3
3
3
3
144
144
144
144
144
144
1,830
1,838
1,840
1,840
1,840
1,836
462
462
462
462
462
462
30
30
30
30
30
30
9
9
9
9
9
9
2
2
2
2
2
2
7,144
7,139
7,141
7,149
7,148
7,157
7,174
7,169
7,179
7,188
7,234
7,205
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