1 - Annual Report
Comprehensive Annual Financial Report
For the Year Ended December 31, 2020
Prairie Park Pickleball Courts – Opened 2020
City of Otsego, Minnesota
Comprehensive Annual Financial Report
For the Year Ended
December 31, 2020
Adam Flaherty
City Administrator
Prepared by:
Finance Department
Member of the:
Government Finance Officers’ Association
of the United States and Canada
CITY OF OTSEGO, MINNESOTA
TABLE OF CONTENTS
Page No.
INTRODUCTORY SECTION
Letter of Transmittal 1
Elected Officials and Administration 7
Organizational Chart 8
Certificate of Achievement 9
FINANCIAL SECTION
Independent Auditor's Report 11
Management's Discussion and Analysis 14
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 28
Statement of Activities 29
Fund Financial Statements
Governmental Funds
Balance Sheet 30
Reconciliation of the Balance Sheet of the Governmental Funds
to the Statement of Net Position 32
Statement of Revenues, Expenditures and Changes in Fund Balances34
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of the Governmental Funds to the Statement of Activities 36
Statement of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
General Fund 37
Proprietary Funds
Statement of Net Position 38
Statement of Revenues, Expenses and Changes in Net Position 39
Statement of Cash Flows 40
Notes to the Financial Statements 41
Required Supplementary Information
Schedule of Employer's Proportionate Share of Net Pension Liability 76
Schedule of Employer's Contributions 77
Notes to Required Supplementary Information 78
Combining and Individual Fund Statements and Schedules
Governmental Funds
Nonmajor Governmental Funds
Combining Balance Sheet 82
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 83
Nonmajor Special Revenue Funds
Combining Balance Sheet 86
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 87
Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
Revolving Loans Fund 88
Tax Increment District No. 1 Fund 89
Tax Increment District No. 3 Fund 90
Nonmajor Capital Projects Funds
Combining Balance Sheet 94
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 98
Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
General Fund 101
CITY OF OTSEGO, MINNESOTA
TABLE OF CONTENTS
Debt Service Fund by Account
Combining Balance Sheet 106
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 108
Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
Series 2012A 110
Series 2018A 111
Series 2020A 112
Series 2010B 113
Series 2007B 114
STATISTICAL SECTION (UNAUDITED)
Financial Trends
Net Position by Component 116
Changes in Net Position 118
Governmental Activities Tax Revenue by Source 124
Fund Balances of Governmental Funds 126
Changes in Fund Balances of Governmental Funds 128
Revenue Capacity
Estimated Actual Value, Taxable Market Value and Tax Capacity of Taxable Property 130
Tax Capacity of Real Estate & Personal Property 132
Property Tax Rates - Direct and Overlapping Governments 133
Principal Property Taxpayers 134
Property Tax Levies and Collections 135
Debt Capacity
Ratios of Outstanding Debt by Type 136
Ratios of General Bonded Debt Outstanding 137
Computation of Direct and Overlapping Governmental Activities Debt 138
Legal Debt Margin Information 140
Pledged Revenue Coverage 142
Demographic and Economic Information
Demographic and Economic Statistics 143
Principal Employment Sectors 144
Operating Information
Full-Time City Government Positions by Function 145
Operating Indicators by Function 146
Capital Asset Statistics by Function 147
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City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441-4414 Fax (763) 441-9163
May 24, 2021
Honorable Mayor and Members of the City Council
City of Otsego
Transmitted herewith is the Comprehensive Annual Financial Report of the City of
Otsego for the fiscal year ended December 31, 2020.
Responsibility for both the accuracy of the data and the completeness and fairness of the
presentation, including all disclosures, rests with the management of the City following
the policies and procedures specified by the City’s system of internal control. Because
the cost of internal controls 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.
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 deemed necessary
to enable the reader to gain an understanding of the City’s financial activities have been
included.
Minnesota Statutes require that the financial statements of the City be audited annually
by the State Auditor or a Certified Public Accountant selected by the City Council. These
financial statements have been audited by BerganKDV (the Auditors). The Auditors
expressed an unmodified opinion on the financial statements, and their opinion letter is
included as the first component within the financial section of this report.
The Auditors have also issued a number of other reports on compliance with Government
Auditing Standards and Minnesota Legal Compliance. These reports have been issued
under separate cover.
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 a 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.
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City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441-4414 Fax (763) 441-9163
PROFILE OF THE CITY
The first town site in Otsego was originally platted in 1857 in what was once known as
the Big Woods, heavily laden with deciduous trees, and interspersed with rivers, ponds,
and prairies. The first settlers to the area were of European descent settling the area in
1852. On April 5, 1858, Otsego Township was established. The area remained a
township until 1990 when it was incorporated into the City of Otsego to more fully serve
its residents and to manage growth.
Otsego is located at the confluence of the Mississippi and Crow Rivers approximately
thirty miles northwest of Minneapolis. The Mississippi River runs along the northern and
eastern borders of the City and the Crow River runs along the southern border in the far
eastern part of the City until it enters the Mississippi River.
The City is located in the northeast corner of Wright County and covers an area of about
30.5 square miles. The State Demographer’s most recent population estimate was
18,130, compared with 6,389 from the 2000 US Census. Otsego is the fastest growing
City in Wright County and outpaces growth in neighboring cities outside Wright County.
The City operates under the “Optional Plan A” form of government as defined in
Minnesota Statutes. Under this plan, the government of the City is directed by a City
Council consisting of an elected mayor and four elected councilmembers at large. The
City Council exercises legislative authority and determines all matters of policy. The
City Council appoints personnel responsible for the proper administration of all affairs
relating to the City. The mayor and councilmembers serve four year terms with two
councilmembers elected to four year terms every two years. The mayor is also elected to
a four year term.
The City provides its residents and businesses a full range of municipal services
consisting of the construction & maintenance of highways, streets, and other
infrastructure, park facilities, recreational opportunities, and general administrative
services. The City services also provide public utilities including water, sanitary sewer
and storm water services accounted for in enterprise funds. Police protection has been
provided for more than 25 years through an agreement with the Wright County Sheriff’s
department which provides 48 hours of service each and every day. Fire suppression and
emergency response services are provided through agreements with the neighboring cities
of Albertville, Elk River and Rogers, with each agreement having geographical
boundaries based upon response times.
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City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441-4414 Fax (763) 441-9163
Financial planning and control for the City of Otsego are based on the annual Operating
Budget and the multi-year Capital Improvement Plan. Under Minnesota Statutes, a
preliminary property tax levy must be adopted by the City Council no later than
September 30th of each year for the ensuing year’s collection. This establishes a
maximum levy that may subsequently be lowered but may not be increased at time of
final adoption. A ceiling on the increase of the annual property tax levy is established
from time to time by the Minnesota Legislature. Such a limit was not in place for taxes
payable 2020 and 2021.
Effective establishment of this levy means that a preliminary operating budget must be
prepared. The City Administrator, with the assistance of the Finance Director and
management staff, prepares such a budget each year and presents it along with the
preliminary levy for City Council review. The City Council is required to adopt a final
tax levy and annual budget each December for the subsequent year, which begins on
January 1. Departments may make transfers of appropriations within their department.
However, transfers of budget appropriations between departments needs authorization of
the City Administrator. The legal level of budgetary control is at the fund level, so any
appropriation transfers between funds needs the approval of the City Council.
In addition, a Capital Improvement Plan covering a ten year period is reviewed and
revised during the annual budget process. This includes projects for which the City may
issue debt and/or assess portions of the cost to adjacent or benefitting property owners.
Because there are limited funds available each year and the City does not wish to issue
excessive amounts of debt, these projects are reviewed and reprioritized each year.
ECONOMIC CONDITION
Otsego continues to experience strong residential and commercial growth due to its ideal
location. The City is 30 miles from downtown Minneapolis, the center of the Twin Cities
metropolitan area and has excellent transportation access with Interstate 94 and State
Highway 101. The City maintains a Comprehensive Plan document for land use and
development to manage and encourage growth.
The residential growth can be expressed with the 403 new residential construction
permits issued during 2020. The average number of new residential construction permits
through the past five years is 286. The latest estimates from the State Demographer’s
office show total households at 6,254 or a growth of 32 percent since 2010.
The City is expecting for this trend in residential housing growth to continue into the
future as well. There have been a number of builders continuing to develop properties
and go through the final platting process.
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City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441-4414 Fax (763) 441-9163
The taxable market value of property within the City increased $196 million (10.32
percent) to a total of $2,087,427,000 for taxes payable 2021. According to Wright
County, for taxes payable 2020, there was approximately $98 million of value added for
new residential and commercial / industrial development. The remaining portion of the
growth would be due to market driven factors. The increased taxable value translates into
increased tax capacity and has allowed the City to maintain or slightly decrease the
property tax rate in seven consecutive years. The City’s tax rate for payable 2021 is
34.653.
During 2020, the City approved a large commercial-industrial project within one of the
City’s industrial parks. The project encompasses an approximate 54 acre site, will include
more than 55 thousand square feet of office, shop, and warehousing space and will add a
significant number of jobs in the City.
Aligned with the City’s Strategic Plan of having diverse housing options, and currently
under construction, The Village of Otsego Apartments and the Parkview Grand
Apartments will provide continued expansion of multiple family housing choices for
residents looking to call Otsego home. The first phases of these complexes include 170
market rate apartment units, with one, two- and three-bedroom options, with leasing
expected to begin in the winter of 2021-2022.
In 2020, Independent School District No. 728 initiated construction of the first middle
school within the City. The new middle school will help serve the educational needs of
the rapid residential growth occurring within the City. The City is working closely with
School District officials on the project, with construction expected to be complete for the
2022-2023 school year.
The City is committed to efforts in growing the commercial, retail and industrial sectors
within the City to provide employment, services and tax base within the community.
LONG-TERM FINANCIAL PLANNING
The City has adopted and annually updates a ten-year Capital Improvement Plan (CIP) to
facilitate the growth and maintenance of public infrastructure, community facilities and
capital equipment. Projects in the CIP demonstrate the importance of developing long
range financial planning strategies to facilitate the growth and prosperity of the City. The
process assists with both short and long range financial planning needs by:
Prioritizing capital projects and equipment acquisitions
Estimating resource needs and related cash flows
Identifying adequate and sustainable funding sources
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City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441-4414 Fax (763) 441-9163
MAJOR INITIATIVES
With all of the growth that has been experienced in Otsego, the City has identified the
need to expand our future planning, and has illustrated this by developing a Strategic
Plan. Within this Plan, the City has developed a practical vision of what Otsego should be
in three to five years. The following list outlines the City’s strategic directions with
certain examples of initiatives that have been accomplished in 2020 or set as goals in
2021.
Positioning for Growth.
o Completed a Utility Rate Study
o Initiated design of West Wastewater Facility Expansion Project
o Initiated a facility and space needs analysis for City Hall & Public Works
Empowering the Organization.
o Commitment to an annual Strategic Planning process
o Conducted an Employee Survey to gauge employee engagement
o Implemented 1-on-1 Employee & Supervisor Meetings
Engaging Stakeholders.
o Soil Improvements of City Owned Property for Development
o Establish a Community Survey to Obtain Feedback from Residents
o Participation in Legislative Focus Groups for Transportation
RELEVANT FINANCIAL POLICIES
The City Council has approved a fund balance policy that established the minimum fund
balance requirements of the General Fund at forty-five percent of the subsequent year’s
expenditures. The policy also includes the annual review of the fund balance reserves of
all other funds and the criteria for the use of reserves. Reserve balances are reviewed
annually as part of the budget/financial planning process and at the time the Capital
Improvement Plan is approved by the City Council.
Financial management staff of the City of Otsego have developed and implemented
internal controls designed to protect the City’s assets from loss, abuse, theft or other
misappropriation. These controls provide reasonable assurance of the safety of the City’s
assets while recognizing that management estimates and judgements as to the cost of
such controls are also important to deriving maximum benefit from these controls.
Policies relating to investment of City funds, billing and collection of public utility
charges, management of long term debt, purchasing, fund balances and general
accounting procedures have been developed. In addition, goals and objectives have been
established for internal and external financial reporting and for long-term financial
planning strategies.
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City of Otsego│13400 90th Street NE, Otsego, MN 55330│Tel. (763) 441-4414 Fax (763) 441-9163
FINANCIAL REPORTING AWARD
The Government Finance Officers Association of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City
of Otsego for its 2019 Comprehensive Annual Financial Report (CAFR). The City first
applied for this award in 2012, and has received the award every year since.
In order to be awarded a Certificate of Achievement, a government must publish an
easily readable and efficiently organized comprehensive annual financial report. The
report must satisfy both accounting principles generally accepted in the United States and
applicable federal, state and local legal requirements.
A Certificate of Achievement is valid for a period of one year. It is expected that the
2020 report conforms to the Certificate of Achievement program requirements. It will be
submitted to the GFOA to determine the City’s eligibility for another Certificate.
ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the expertise and
dedication of the City’s staff. Further, the City Council’s support to promote and sustain
the highest standards of professionalism in the financial management of the City of
Otsego are acknowledged and appreciated.
Respectfully submitted,
Adam Flaherty
City Administrator & Finance Director
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CITY OF OTSEGO, MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATION
ELECTED OFFICIALS
Name Position Term Expires
Jessica Stockamp Mayor December 31, 2020
Jason Warehime Council Member December 31, 2020
Corey Tanner Council Member December 31, 2020
Tina Goede Council Member December 31, 2022
Tom Darkenwald Council Member December 31, 2022
ADMINISTRATION
Name Position
Audra Etzel City Clerk
Adam Flaherty City Administrator & Finance Director
Kevin Lamson Street Operations Manager
Ross Demant Parks & Recreation Director
Kurt Neidermeier Public Utilities Manager
David Kendall City Attorney
Daniel Licht City Planner
Ron Wagner City Engineer
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Organizational Chart
Otsego Residents
City Council
City Administrator
Advisory Commissions
Planning
Parks and Recreation
Public Safety
Heritage Preservation
Public Safety
Police
Fire
Building Inspections
Professional Services
Planning
Engineering
Legal
Administrative Services
Finance
Utility Billing
Information Technology
Customer Service
City Clerk
Elections
Human Resources
Payroll
Public Works
Streets
Vehicle Fleet
City Buildings
Public Utilities
Water
Sanitary Sewer
Storm Water
Parks & Recreation
Parks & Trails
Recreation
Prairie Center
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Otsego
Minnesota
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
December 31, 2019
Executive Director/CEO
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10
Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Otsego
Otsego, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of Otsego,
Minnesota, as of and for the year ended December 31, 2020, and the related notes to 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
The City of Otsego’s 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 misstatements,
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.
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Opinions
In our opinion, the financial statements referred to in the first paragraph present fairly, in all material
respects, the respective financial position of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City of Otsego, Minnesota, as of
December 31, 2020, and the respective changes in financial position and, where applicable, cash flows
thereof and the respective budgeting 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, which follows this report letter, and Required Supplementary Information 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 (GASB), 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 Required Supplementary Information 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, combining and
individual fund financial statements and schedules and statistical section are presented for purposes of
additional analysis and are not a required part of the basic financial statements.
The combining and individual fund financial statements and schedules are the responsibility of
management and were derived from and relate 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 combining and individual fund financial statements and schedules
are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
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Other Matters (Continued)
Other Information (Continued)
The supplementary information contains prior year comparative information taken from the City's 2019
financial statements. We also have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the City's basic financial statements for the year ended
December 31, 2019, which are not presented with the accompanying financial statements. In our report
dated May 20, 2020, we expressed unmodified opinions on the respective financial statements of
governmental activities, business type activities, each major fund, and the aggregate remaining fund
information. In our opinion, the 2019 supplementary information is fairly stated in all material respects
in relation to the basic financial statements for the year ended December 31, 2019, taken as a whole.
The introductory section and statistical section 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 24, 2021,
on our consideration of the City of Otsego's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of 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 of
Otsego's internal control over financial reporting and compliance.
St. Cloud, Minnesota
May 24, 2021
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CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
As management of the City of Otsego, Minnesota, (the City), we offer readers of the City's financial statements this narrative overview and
analysis of the financial activities of the City for the fiscal year ended December 31, 2020. We encourage readers to consider the
information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found
on pages 1-6 of 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 the
most recent fiscal year by $116,012,488 (net position). Of this amount, $37,380,503 (unrestricted net position) may be used to meet
the City's ongoing obligations to citizens and creditors.
• The City's total net position increased by $15,358,510 (15.26%) from the previous year. The net position of the governmental
activities increased $4,892,984 (9.71%). The increase is primarily attributable to the investment in public assets and infrastructure by
the City and housing developers in the community. This infrastructure consists of streets, trail systems and park additions. The business
type activities increased $10,465,526 (20.82%) due to a combination of connection fees to the City's public utility system, and similar
to the governmental activities, the investment in public assets and infrastructure.
• As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $19,110,873,
which is an increase of $2,097,107 (12.33%) from the previous year. Of the total fund balance, the unassigned portion is $1,174,774,
which is free from any internal or external constraints upon its use.
• The General fund has a fund balance of $5,987,733 at the close of the current fiscal year. During 2020, the fund balance increased
$1,667,923 (38.61%) from the previous year. The increase in fund balance can be attributed to license and permit, as well as
intergovernmental revenues exceeding budget. In accordance with the City's fund balance policy, a transfer of $932,244 was made to
the Capital Improvements, Trails Management, and City Buildings & Property Maintenance funds. That policy indicates that any fund
balance exceeding 45% of the subsequent years budget will be transferred, and set aside for future capital expenditures. There is
$334,946 (5.59%) of fund balance that is nonspendable, which is a combination of prepaid items and land held for resale. The remainin
fund balance is either assigned, $242,785 (4.05%) or is unassigned, $5,410,002 (90.36%).
• The City issued $2,950,000 of General Obligation Revenue Refunding bonded debt during the year to refund the 2010D and the 2011A
bond issues to take advantage of lower interest rates, resulting in a decrease of future debt service payments. The City's total
outstanding bonded debt decreased by $3,885,000 (16.36%) during the current fiscal year.
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CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City’s basic financial statements. The City's basic
financial statements include three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes
to the financial statements. This report also contains other supplementary information in addition to the basic financial statements
themselves.
Government-Wide Financial Statements: The government-wide financial statements are designed to provide readers with a
broad overview of the City's finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets, liabilities and deferred inflows/outflows 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 City's overall financial position is stable, 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 the
related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in
future fiscal periods (e.g. uncollected taxes, special assessments and earned but unused personal time off).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion
of their costs through user fees and charges (business-type activities). The governmental activities of the City include: general
government, public safety, public works, culture & recreation, economic development, and interest on long-term debt.
The business- type activities of the City include: water utility, sanitary sewer utility and storm water utility.
The government-wide financial statements can be found on pages 28 through 29 of this report.
Fund Financial Statements: A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to
ensure and demonstrate compliance with finance-related legal requirements. The funds of the City can be divided into two
categories: governmental funds and proprietary funds.
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CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Governmental Funds: Governmental funds are used to account for essentially the same functions reported as governmental
activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental
fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financial
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 City's near-term
financial decisions. Both the governmental funds balance sheet and governmental funds statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental
activities.
The City maintains 23 individual governmental funds. Information is presented separately in the governmental funds balance sheet
and in the governmental funds statement of revenues, expenditures, and changes in fund balances for the following: General fund,
the Debt Service fund, the MSA Construction fund, the Capital Improvements fund, and the Development & Builder Escrows fund, which
are considered to be major funds. Data from the remaining governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements or schedules,
elsewhere in this report.
The City adopts an annual appropriated budget for the General Fund, the Debt Service Fund, the Revolving Loan, Tax Increment District
No. 1, Tax Increment District No. 3 special revenue funds. A budgetary comparison statement has been provided in the basic financial
statements for the General fund.
The basic governmental fund financial statements can be found on pages 30 through 37 of this report.
Proprietary Funds: Proprietary funds provide similar information to the government-wide financial statements, but in more
detail. The City maintains one type of proprietary fund.
Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial
statements. The City uses enterprise funds to account for its water, sanitary sewer and storm water utilities. All of the City's
enterprise funds are considered to be major funds, and separate information is provided for each of them in the basic financial
statements.
The basic proprietary fund financial statements can be found on pages 38 through 40 of this report.
Notes to the Financial Statements: The notes provide additional information that is essential to a full understanding of the data
provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages
41 through 74 of this report.
Other Information: In addition to the basic financial statements and accompanying notes, this report also presents certain
required supplementary information in relation to the City's net pension liability. The schedules can be found on pages 76 through 80
of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following
the required supplementary information. Combining statements can be found on pages 82 through 114 of this report.
16
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City,
assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $116,012,488 at the close of
the most recent fiscal year.
The largest portion of the City's net position ($71,186,563 or 61.36%) reflects its investment in capital assets, which includes: land,
infrastructure, buildings, and machinery & equipment, less any related debt used to acquire those assets that is still outstanding.
The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Increase Increase
2020 2019 (Decrease) 2020 2019 (Decrease)
Current Assets 31,770,371$ 27,290,747$ 4,479,624$ 26,894,333$ 19,540,834$ 7,353,499$
Capital Assets 40,752,252 38,752,165 2,000,087 61,029,397 48,860,266 12,169,131
Total Assets 72,522,623 66,042,912 6,479,711 87,923,730 68,401,100 19,522,630
Deferred Outflows of Resources 193,838 115,522 78,316 54,113 29,860 24,253
Long-term Liabilities 6,009,043 7,079,876 (1,070,833) 22,268,031 15,442,116 6,825,915
Other Liabilities 7,755,864 5,245,641 2,510,223 4,967,557 2,679,487 2,288,070
Total Liabilities 13,764,907 12,325,517 1,439,390 27,235,588 18,121,603 9,113,985
Deferred Inflows of Resources 3,668,954 3,443,301 225,653 12,367 44,995 (32,628)
Net Investment in Capital Assets 34,622,760 31,373,524 3,249,236 36,563,803 31,344,999 5,218,804
Restricted 7,445,422 7,658,124 (212,702) - - -
Unrestricted 13,214,418 11,357,968 1,856,450 24,166,085 18,919,363 5,246,722
Total Net Position 55,282,600$ 50,389,616$ 4,892,984$ 60,729,888$ 50,264,362$ 10,465,526$
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the
government as a whole, as well as for its separate governmental and business-type activities.
A portion of the City’s net position (6.42%) represents resources that are subject to external restrictions on how they may be used.
The unrestricted portion (32.22%) may be used to meet the City's ongoing obligations to citizens and creditors.
The governmental activities experienced significant increases in both current and capital assets. The increase of current assets is due to
increased cash and investment balances, with the General fund increasing as a result of the CARES Act stimulus funding, and the
Development & Builder Escrows fund increased as a result of additional active development projects within the City. The increase in
capital assets can be explained with projects such as Parkview Avenue & 88th Street Improvements, Pickleball Courts, Splash Pad, and
fleet vehicles and equipment. The increase in liabilities is a net result, with long-term liabilities decreasing as a result of continued debt
service payments, with current liabilities increasing in the Development & Builder Escrows fund due to active development projects.
The assets of the business-type activities increased as a result of cash and investment balances from continued growth in development,
which generates revenues such as water and sewer access fees. Additional current asset increases attributate to a due from other
government balance for the 2020 PFA Note, and increased special assessments. The capital asset increases were attributable to ongoing
investment in the utility system infrastructure. The long-term liabilities increased with the issuance of the 2020 PFA Note and the current
liabilities increased with accounts payable balances for the ongoing infrastructure projects.
CITY OF OTSEGO - SUMMARY OF NET POSITION
Governmental Activities Business-type Activities
17
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Increase Increase
2020 2019 (Decrease) 2020 2019 (Decrease)
Program Revenues
Charges for Services 3,401,691$ 2,564,173$ 837,518$ 4,702,829$ 4,098,150$ 604,679$
Operating Grants and Contributions 366,461 319,332 47,129 2,157 - 2,157
Capital Grants and Contributions 3,212,230 3,361,497 (149,267) 9,214,377 6,543,224 2,671,153
General Revenues
Property Taxes 7,170,868 6,681,989 488,879 32,000 30,000 2,000
Tax Increment 275,445 97,419 178,026
Franchise Taxes 132,137 137,510 (5,373) - - -
Grants and Contributions not
Restricted to Specific Programs 1,411,685 162,120 1,249,565 - - -
Unrestricted Investment Earnings 625,964 754,079 (128,115) 688,236 748,799 (60,563)
Other General Revenues - 47,362 (47,362) - - -
Total Revenues 16,596,481 14,125,481 2,471,000 14,639,599 11,420,173 3,219,426
Expenses
General Government 1,616,634 1,383,291 233,343 - - -
Public Safety 2,683,103 2,411,751 271,352 - - -
Public Works 4,967,363 3,387,481 1,579,882 - - -
Culture and Recreation 1,151,569 1,177,721 (26,152) - - -
Economic Development 889,173 741,705 147,468 - - -
Interest on Long-term Debt 247,702 212,402 35,300 - - -
Water Utility - - - 1,443,522 1,729,938 (286,416)
Sanitary Sewer Utility - - - 2,739,519 2,600,436 139,083
Storm Water Utility - - - 138,985 123,163 15,822
Total Expenses 11,555,544 9,314,351 2,241,193 4,322,026 4,453,537 (131,511)
Increase Before Transfers 5,040,937 4,811,130 229,807 10,317,573 6,966,636 3,350,937
Transfers 262,369 212,869 49,500 (262,369) (212,869) (49,500)
Transfers - Capital Assets (410,322) (520,896) 110,574 410,322 520,896 (110,574)
Change in Net Position 4,892,984 4,503,103 389,881 10,465,526 7,274,663 3,190,863
Net Position - January 1 50,389,616 45,886,513 4,503,103 50,264,362 42,989,699 7,274,663
Net Position - December 31 55,282,600$ 50,389,616$ 4,892,984$ 60,729,888$ 50,264,362$ 10,465,526$
CITY OF OTSEGO - CHANGES IN NET POSITION
Governmental Activities Business-type Activities
18
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Governmental Activities
Governmental activities resulted in an increase of the City's net position by $4,892,984. Key elements of this change is as follows:
• Revenues increased $2,471,000 (17.49%) from the previous year; with the most notable increase within grants and contributions
not restricted to specific programs which is specifically related to the CARES Act stimulus funding. Charges for services also
increased, with offsetting decreases in capital grants and contributions, and unrestricted investment earnings.
• Expenses increased $2,241,193 (24.06%) from the previous year. The most notable increase was within the public works, which was
the result of local share contributions for two major Wright County road improvement projects. Increases were shown for all other
governmental functions, with the exception of the culture and recreation function, which had decreased activity due to COVID-19.
Below are specific graphs which provide comparisons of the governmental activities revenues and expenses:
Charges for Services
20.50%
Operating Grants
2.21%
Capital Grants
19.35%
Property Taxes
43.20%
Tax Increment
1.66%
Franchise Taxes
0.80%
Unrestricted Grants &
Contributions
8.51%
Investment Earnings
3.77%
Revenues by Source
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
General
Government
Public Safety Public Works Culture &
Recreation
Economic
Development
Interest on Long-
Term Debt
Function Expenses vs. Program Revenues
Expense Program Revenue
19
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Business-type Activities
Business-type activities resulted in an increase of net position by $10,465,526. Key elements of this change are as follows:
• An increase was noted in revenues, $3,219,426 (28.19%), most significantly in capital grants and contributions, and represents a
combination of utility system availability and connection fees, as well as capital asset contributions from developers.
• Expenses decreased $131,511 (2.95%), attributable to services and other charges within the Water Utility fund.
• Revenues exceeded expenses by $10,317,573 primarily the result of the continued residential growth within the City. This housing
growth generates connection fees to the public utility system, which is used to retire debt service and for future capital costs.
Below are specific graphs which provide comparisons of the business-type activities revenues and expenses:
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
Water Utility Sanitary Sewer Utility Storm Water Utility
Function Expenses vs. Program Revenues
Expense Program Revenue
Charges for Services
32.12%
Capital Grants
62.95%
Operating Grants
0.01%
Property Taxes
0.22%
Investment Earnings
4.70%
Revenues by Source
20
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Financial Analysis of the Government's Funds
Governmental Funds: The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and
balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned
fund balance may serve as useful measure of a government's net resources available at the end of the fiscal year.
At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $19,110,873, which
is an increase of $2,097,107 (12.33%) from the previous year. The unassigned fund balance, which is not subject to internal or
external constraints upon its use, $1,174,774 (6.15% of total).
Major Funds
The General fund is the primary operating fund of the City. At the end of the current fiscal year, total fund balance is $5,987,733, an
increase of $1,667,923 (38.61%). The increase in fund balance was largely the result of revenues exceeding expenditures by $2,398,372.
Revenues were over budget by $2,944,725, with the two primary factors being that actual licenses and permits exceeded estimates from
the budget process; and the CARES Act stimulus funding. Expenditures were in excess of budget, most significantly in the economic
development function, the result of grants awarded to local businesses, made possible through the CARES Act stimulus funding. In
accordance with the City's fund balance policy, a transfer out of $932,244 was made to the Capital Improvements, Trails Management,
and City Buildings & Property Maintenance funds for future capital needs. As a measure of the General fund's liquidity, it may be useful
to compare both unassigned and total fund balance, to total fund expenditures. The unassigned fund balance, which is $5,410,002,
represents 81.26% of the current year General fund expenditures. Total General fund balance represents 89.94% of those same
expenditures.
The Debt Service fund has a total fund balance of $1,120,071 at the end of the year, a decrease of $427,779 (27.64%) from the
previous year. The City retired $4,500,000 of principal on the outstanding bonded debt during 2020.
The MSA Construction fund has a deficit fund balance of $4,235,228 and is the result of ongoing capital expenditures for the 85th
Street and Maciver Avenue street extension project, which totaled $683,811 during the year. The fund balance deficit will be
reduced over the next five years, as municipal-state-aid for construction revenue will reimburse the City for the project costs.
The Capital Improvements fund has a fund balance of $1,514,242 at the end of the year, a decrease of $1,503,593 (49.82%) from the
previous year. Expenditures for the year totaled $2,609,023, which were for the Parkview Avenue and 88th Street improvement project,
as well as the local share contributions for two major Wright County road improvement projects.
The Development & Builder Escrows fund has no fund balance at the end of the current fiscal year. The fund has assets in the amount
of $5,667,316, all of which are cash and investment balances that offset the accounts and deposits payable within the fund. The revenues
and expenditures in this fund correlate with the level of development activity within the City.
Proprietary Funds: The City's proprietary funds provide the same type of information presented as business-type activities
found in the government-wide financial statements, but in more detail.
The enterprise funds have a combined ending net position of $60,729,888, an increase of $10,465,526 (20.82%). There are two
components to net position in the enterprise funds, unrestricted ($24,166,085 or 39.79%) and net investment in capital assets
($36,563,803 or 60.21%). As a measure of liquidity, the unrestricted net position amounts to 628.78% of the current year operating
expenses. Other factors concerning the finances of these funds have already been addressed in the discussion of the City's
business-type activities.
21
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Below is a graph with comparative amounts for each fund balance component for fiscal years 2018, 2019 and 2020:
The City's Unassigned fund balance is currently $1,174,774, and represents 6.15% of total governmental fund balance. The
City also has four other components of fund balance, including Nonspendable (1.75%), Restricted (28.64%), Committed (2.54%) and
Assigned (60.92%).
• Nonspendable fund balance represents the amount of assets the City has invested in prepaid items and land assets held for resale. This
fund balance component can largely fluctuate with the timing of certain payments (e.g. insurance premiums) and the net realizable
value of the land assets being held by the City for future resale.
• The City's restricted fund balance is the result of external constraints placed upon it. The source of that constraint includes debt service
park development, and tax increments. The debt service component has decreased slightly over the past three years as the bonds
payable balance has declined, while the park dedication component has increased due to revenues exceeding expenditures.
• The committed fund balances are within the City's special revenue funds for Street Lighting and Revolving Loans. This
fund balance component has stayed consistent over the past three years.
• Assigned fund balances are primarily associated with the City's capital project funds. The fund balance in this component
is the result of the City accumulating resources for future capital improvement projects and capital equipment purchases.
A more detailed breakdown of the fund balance components can be found in the basic financial statements and accompanying
financial statement footnotes.
(2,000,000)
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
Nonspendable Restricted Committed Assigned Unassigned
Governmental Fund Balance Components
2018 2019 2020
22
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
General Fund Budgetary Highlights
During the year, there were no amendments to the General fund budget. The budgeted revenues and expenditures resulted in
no change in fund balance. Actual results for the fiscal year were an increase of $1,667,923 (38.61%). The key elements of this change
are as follows:
• Actual revenues exceeded the budget by $2,944,725 (48.19%). The largest revenue variance was provided by licenses and
permits, which were over budget by $1,446,569. The City projected 200 new residential construction permits when preparing the
budget with actual results being 403 new residential construction permits. Another signicant variance was within intergovernmental,
which exceeded the budget by $1,321,214 due to the CARES Act stimulus funding that was not budgeted.
• Actual expenditures exceeded the budget by $344,653 (5.46%). The largest variance was within the economic development function
and is the result of grants to local businesses, made possible with the CARES Act stimulus funding. The Building Safety department
was the only other significant variance, which was over budget in services and other charges.
• Transfers in exceeded the budget by $95. These transfers are from the Water and Sanitary Sewer utility funds, and are
annual contributions to help manage the property tax levy.
• Transfers out were not budgeted for during 2020. The actual transfer out of $932,244 is in accordance with the City's fund balance
policy. That policy outlines that any General fund balance exceeding 45% of the subsequent year's expenditure budget will be
transferred, and assigned for future capital items.
The ending unassigned fund balance of the General fund ($5,410,002) represents 81.83% of the adopted 2021 budget.
23
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Capital Asset and Debt Administration
Capital Assets: The City's investment in capital assets for its governmental and business-type activities at the end of the current
year, amounts to $101,781,649 (net of accumulated depreciation). This investment in capital assets includes: land, buildings, street and
utility infrastructure, parks equipment, trails, machinery and equipment and construction in progress. The City's investment in
capital assets increased $14,169,218 (16.17%) from the previous year.
Major capital asset events during the current year included the following:
• The City updated its machinery & equipment fleet with several new pieces of equipment. The City maintains a ten-year capital
improvement plan budget which schedules equipment and vehicle replacements and additions.
• The Parkview Avenue and 88th Street improvement project was nearly completed during the year. The new road construction created
access from CSAH 42 to the Parkview Retail commercial development. The project included new infrastructure including streets,
water, sanitary sewer and storm water.
• The City received contributed infrastructure from housing developers. These assets include: streets, trail systems, and public utility
infrastructure. These assets are paid for and installed by the developer, are inspected by the City Engineer to City standards, and are
later accepted by the City, who is responsible for future maintenance and replacement.
• The City initiated the East Wastewater Treatment Facility Biosolids project that removes the long-term liquid storage from the facility
by further processing the material into a dry matter, which can be removed from the site to landfills or distributed as fertilizer.
• The City constructed Pickleball Courts within Prairie Park. The project included construction of four courts, with common spaces
between the four courts for seating and shade.
• The City made technological upgrades including updating and replacement of the City's server system, as well as audio-visual
improvements to the Council Chambers to improve the experience and to accommodate electronic meetings during COVID-19.
• The City completed the construction of Well No. 9 which increases the water production ability of the City, and also initiated the
Water Tower No. 4 project, which includes watermain and construction of a 1.50 million gallon water storage tank.
Increase Increase
2020 2019 (Decrease) 2020 2019 (Decrease)
Land 4,278,161$ 3,840,461$ 437,700$ 703,695$ 631,739$ 71,956$
Construction in Progress 796,561 6,038,505 (5,241,944) 10,619,801 3,771,825 6,847,976
Buildings and Improvements 4,317,953 4,479,102 (161,149) 150,733 161,431 (10,698)
Land Improvements 3,513,709 3,778,467 (264,758) - - -
Machinery and Equipment 1,893,111 1,964,075 (70,964) 1,051,808 1,051,475 333
Infrastructure 25,952,757 18,651,555 7,301,202 48,503,360 43,243,796 5,259,564
40,752,252$ 38,752,165$ 2,000,087$ 61,029,397$ 48,860,266$ 12,169,131$
Additional information on the City’s capital assets can be found in Note 3 (B) on pages 54 through 55 of this report.
(net of depreciation)
Governmental Activities Business-type Activities
CITY OF OTSEGO - CAPITAL ASSETS
24
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Long-Term Debt: At the end of the current year, the City had outstanding long-term bonded debt of $29,303,936.
Increase Increase
2020 2019 (Decrease) 2020 2019 (Decrease)
General Obligation Bonds 5,760,000$ 7,310,000$ (1,550,000)$ -$ -$ -$
Notes from Direct Borrowings - - - 9,438,936 - 9,438,936
General Obligation Revenue Bonds - - - 14,105,000 16,440,000 (2,335,000)
Unamortized Premiums 369,492 68,641 300,851 921,658 1,075,267 (153,609)
Compensated Absences 102,331 91,889 10,442 25,139 17,875 7,264
Total 6,231,823$ 7,470,530$ (1,238,707)$ 24,490,733$ 17,533,142$ 6,957,591$
Revenue streams for the repayment of the outstanding debt liabilities include: special assessments upon benefitting properties, fees
from new connections to the water and sanitary sewer utility systems, and property tax levies. Should any of these sources of
revenues prove inadequate, all outstanding bonds are backed by the full faith and credit of the City.
During 2020, the City issued $2,950,00 of General Obligation Revenue Refunding Bonds to achieve interest savings from lower interest
rates. The refunding resulted in a decrease of future debt service payments in the amount of $182,257, with a net present value cash flow
savings in the amount of $177,619. The City made scheduled principal payments of $6,835,000, which provided a net reduction
of $3,885.000 (16.36%) in the total outstanding long-term debt.
The City's bond rating is AA+, with a stable outlook from Standard & Poor's Rating Services.
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Market Value. The
current debt limitation for the City is $56,762,649, with $3,053,423 in debt outstanding that is applicable to the limit.
Additional information on the City’s long-term debt can be found in Note 3 (E) on pages 58 through 62 of this report.
CITY OF OTSEGO - OUTSTANDING DEBT
Governmental Activities Business-type Activities
25
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2020
Economic Factors and Next Year's Budget and Rates
The following economic factors were identified by the City as potentially having an impact on the financial future of the City, and
were considered in preparation of the 2021 operating budgets and capital improvement plans.
• The Taxable Market Value of real estate and personal property within the City increased 10.32% for taxes payable 2021. This
increase is driven by both new construction within the City as well as market driven valuation increases.
• New construction in the residential sector continues within the City. During 2020, the City issued 403 building permits for new
residential construction. The City also continues to see builders final platting new developments for future years construction.
• The City is initiating a project at the City's West Wastewater Treatment Facility. The project, first identified in the City's Master Sewer
Plan, will provide for not only expansion of the facility, but will change the way the City completes the treatment processing within
sanitary sewer operations. Construction of this facility will begin in the spring of 2022, with estimated completion in the winter of 2023
• The City has initiated the construction of Water Tower No. 4, which will be a 1.50 million gallon water storage tank located at the
intersection of CSAH 38 and Macallister Avenue. This tower, identified in the City's Master Water Plan, will increase storage
capacity of the water system to meet growing demand and to provide for ample storage in the event of fires within the City.
• Over the past few years, the City has worked closely on a joint effort project between the City and Wright County. During 2021, the
final phase of the CSAH 39 improvements will be completed. This roadway is the most heavily travelled non-state highway in the City
and will address safety issues, rising traffic counts, public and private utility improvements, and additional pedestrian trail facilities.
• The City continues to expand upon and make improvements to the Capital Improvement Plan (CIP). The adopted CIP for 2021
plans for capital purchasing ten years into the future. These long range planning efforts assure that the City is always looking into the
future and that the City is adequately planning from a financial resources standpoint.
Requests for Information
This financial report is designed to provide a general overview of the City of Otsego's finances for all those with an interest in the
government's finances. Questions concerning any of the information provided in this report or requests for additional financial
information should be addressed to the: Finance Director, 13400 90th Street NE, Otsego, MN 55330.
26
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27
CITY OF OTSEGO, MINNESOTA
STATEMENT OF NET POSITION
DECEMBER 31, 2020
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Investments 28,552,467$ 22,950,409$ 51,502,876$
Receivables
Interest 99,453 - 99,453
Accounts 14,927 489,329 504,256
Taxes 141,715 - 141,715
Special Assessments 2,625,394 1,497,436 4,122,830
Due from Other Governments 1,469 1,907,996 1,909,465
Land Held for Resale 202,200 - 202,200
Prepaid Items 132,746 49,163 181,909
Capital Assets
Nondepreciable 5,074,722 11,323,496 16,398,218
Depreciable, Net of Accumulated Depreciation 35,677,530 49,705,901 85,383,431
Total Assets 72,522,623 87,923,730 160,446,353
DEFERRED OUTFLOWS OF RESOURCES
General Employees Retirement Plan Pension Resources 193,838 54,113 247,951
Total Deferred Outflows of Resources 193,838 54,113 247,951
LIABILITIES
Accounts Payable 599,493 2,305,331 2,904,824
Deposits Payable 5,634,263 - 5,634,263
Due to Other Governments 64,989 31,556 96,545
Accrued Salaries Payable 32,163 8,028 40,191
Accrued Interest Payable 44,490 76,748 121,238
Compensated Absences Payable
Due Within One Year 20,466 5,028 25,494
Due in More than One Year 81,865 20,111 101,976
Bonds Payable
Due Within One Year 1,360,000 2,410,000 3,770,000
Due in More than One Year 4,769,492 12,616,658 17,386,150
Notes from Direct Borrowings
Due Within One Year - 130,866 130,866
Due in More than One Year - 9,308,070 9,308,070
General Employees Retirement Plan Net Pension Payable
Due in More than One Year 1,157,686 323,192 1,480,878
Total Liabilities 13,764,907 27,235,588 41,000,495
DEFERRED INFLOWS OF RESOURCES
Grants for Subsequent Years 3,624,655 - 3,624,655
General Employees Retirement Plan Pension Resources 44,299 12,367 56,666
Total Deferred Inflows of Resources 3,668,954 12,367 3,681,321
NET POSITION
Net Investment in Capital Assets 34,622,760 36,563,803 71,186,563
Restricted
Debt Service 3,076,069 - 3,076,069
Tax Increment Financing 146,354 - 146,354
Park Development 4,222,999 - 4,222,999
Unrestricted 13,214,418 24,166,085 37,380,503
Total Net Position 55,282,600$ 60,729,888$ 116,012,488$
The notes to the financial statements are an integral part of this statement.
28
CITY OF OTSEGO, MINNESOTA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2020
Program Revenues Net (Expense) Revenue and Changes in Net Position
Operating Capital
Charges For Grants and Grants and Governmental Business-Type
FUNCTIONS/PROGRAMS Expenses Services Contributions Contributions Activities Activities Total
Government Activities
General Government 1,616,634$ 651,770$ -$ -$ (964,864)$ -$ (964,864)$
Public Safety 2,683,103 2,552,748 78,522 - (51,833) - (51,833)
Public Works 4,967,363 174,321 251,422 2,431,300 (2,110,320) - (2,110,320)
Culture and Recreation 1,151,569 22,852 36,517 780,930 (311,270) - (311,270)
Economic Development 889,173 - - - (889,173) - (889,173)
Interest on Long-Term Debt 247,702 - - - (247,702) - (247,702)
Total Government Activities 11,555,544 3,401,691 366,461 3,212,230 (4,575,162) - (4,575,162)
Business-Type Activities
Water Utility 1,443,522 2,108,577 524 2,459,771 - 3,125,350 3,125,350
Sanitary Sewer Utility 2,739,519 2,473,673 1,633 6,300,133 - 6,035,920 6,035,920
Storm Water Utility 138,985 120,579 - 454,473 - 436,067 436,067
Total Business-Type Activities 4,322,026 4,702,829 2,157 9,214,377 - 9,597,337 9,597,337
Total 15,877,570$ 8,104,520$ 368,618$ 12,426,607$ (4,575,162) 9,597,337 5,022,175
General Revenues
Property Taxes 7,170,868 32,000 7,202,868
Tax Increments 275,445 - 275,445
Franchise Taxes 132,137 - 132,137
Grants and Contributions Not
Restricted to Specific Programs 1,411,685 - 1,411,685
Unrestricted Investment Earnings 625,964 688,236 1,314,200
Transfers 262,369 (262,369) -
Transfers - Capital Assets (410,322) 410,322 -
Total General Revenues and Transfers 9,468,146 868,189 10,336,335
Change in Net Position 4,892,984 10,465,526 15,358,510
Net Position - January 1 50,389,616 50,264,362 100,653,978
Net Position - December 31 55,282,600$ 60,729,888$ 116,012,488$
The notes to the financial statements are an integral part of this statement.
29
CITY OF OTSEGO, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2020
Debt
General Service
ASSETS
Cash and Investments 5,644,220$ 1,119,658$
Receivables
Interest 99,453 -
Accounts 13,000 -
Taxes
Current 60,284 -
Delinquent 81,431 -
Special Assessments
Current 1,349 1,217
Deferred 6,898 1,999,522
Delinquent 515 966
Due from Other Governments 1,469 -
Due from Other Funds - -
Land Held for Resale 202,200 -
Prepaid Items 132,746 -
Total Assets 6,243,565 3,121,363
LIABILITIES
Accounts Payable 105,890 804
Accrued Salaries Payable 32,163 -
Deposits Payable - -
Due to Other Governments 28,935 -
Due to Other Funds - -
Total Liabilities 166,988 804
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 81,431 -
Unavailable Revenue - Special Assessments 7,413 2,000,488
Grants for Subsequent Years - -
Total Deferred Inflows of Resources 88,844 2,000,488
FUND BALANCES
Nonspendable 334,946 -
Restricted - 1,120,071
Committed - -
Assigned 242,785 -
Unassigned 5,410,002 -
Total Fund Balances (Deficits) 5,987,733 1,120,071
Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits) 6,243,565$ 3,121,363$
The notes to the financial statements are an integral part of this statement.
30
Development Other
MSA Capital & Builder Nonmajor Total
Construction Improvements Escrows Governmental Governmental
-$ 1,288,097$ 5,667,316$ 14,833,176$ 28,552,467$
- - - - 99,453
- - - 1,927 14,927
- - - - 60,284
- - - - 81,431
- - - 324 2,890
- 298,675 - 313,542 2,618,637
- - - 2,386 3,867
- - - - 1,469
- 321,401 - - 321,401
- - - - 202,200
- - - - 132,746
- 1,908,173 5,667,316 15,151,355 32,091,772
289,172 59,202 33,053 111,372 599,493
- - - - 32,163
- - 5,634,263 - 5,634,263
- 36,054 - - 64,989
321,401 - - - 321,401
610,573 95,256 5,667,316 111,372 6,652,309
- - - - 81,431
- 298,675 - 315,928 2,622,504
3,624,655 - - - 3,624,655
3,624,655 298,675 - 315,928 6,328,590
- - - - 334,946
- - - 4,352,483 5,472,554
- - - 484,582 484,582
- 1,514,242 - 9,886,990 11,644,017
(4,235,228) - - - 1,174,774
(4,235,228) 1,514,242 - 14,724,055 19,110,873
-$ 1,908,173$ 5,667,316$ 15,151,355$ 32,091,772$
31
CITY OF OTSEGO, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF NET POSITION
DECEMBER 31, 2020
Fund Balances - Governmental Funds 19,110,873$
Amounts reported for the governmental activities within 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 56,911,974
Accumulated Depreciation (16,159,722)
Long-term liabilities, including bonds payable, are not due and payable in the
current period, and therefore, are not reported as liabilities in governmental funds.
Bonds Payable (5,760,000)
Unamortized Premium on Bonds Payable (369,492)
Accrued Interest Payable (44,490)
Compensated Absences Payable (102,331)
GERF Pension Payable (1,157,686)
Some receivables are not available soon enough to pay for the current period's
expenditures, and therefore, are unavailable in governmental funds.
Delinquent Property Taxes Receivable 81,431
Special Assessments Receivable 2,622,504
Deferred resources from pensions reported in governmental activities are not
financial resources and are not payable in the current period, therefore are not
reported in governmental funds.
GERF Pension Deferred Outflows of Resources 193,838
GERF Pension Deferred Inflows of Resources (44,299)
Total Net Position - Governmental Activities 55,282,600$
The notes to the financial statements are an integral part of this statement.
32
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33
CITY OF OTSEGO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES (DEFICITS)
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Debt
General Service
REVENUES
Property Taxes 4,497,723$ 746,758$
Tax Increments - -
Franchise Taxes 132,137 -
Licenses and Permits 2,532,789 -
Intergovernmental 1,396,214 -
Charges for Services 257,198 -
Special Assessments 5,434 363,481
Fines and Forfeitures 19,959 -
Investment Earnings (net) 177,948 -
Miscellaneous 36,295 -
Total Revenues 9,055,697 1,110,239
EXPENDITURES
Current
General Government 1,358,923 -
Public Safety 2,667,435 -
Public Works 1,204,664 -
Culture and Recreation 695,747 -
Economic Development 665,798 -
Capital Outlay
General Government 60,712 -
Public Safety - -
Public Works - -
Culture and Recreation 4,046 -
Debt Service
Principal - 1,330,000
Interest - 222,250
Fiscal Agent Fees - 65,483
Total Expenditures 6,657,325 1,617,733
Excess (Deficiency) of Revenues
Over (Under) Expenditures 2,398,372 (507,494)
OTHER FINANCING SOURCES (USES)
Transfers In 201,795 -
Issuance of Refunding Debt - 2,950,000
Premium on Issuance of Debt - 312,200
Payment to Refunded Bond Escrow Agent - (3,170,000)
Transfers Out (932,244) (12,485)
Total Other Financing Sources (Uses)(730,449) 79,715
Net Change in Fund Balance 1,667,923 (427,779)
Fund Balance (Deficit) - January 1 4,319,810 1,547,850
Fund Balance (Deficit) - December 31 5,987,733$ 1,120,071$
The notes to the financial statements are an integral part of this statement.
34
Development Other
MSA Capital & Builder Nonmajor Total
Construction Improvements Escrows Governmental Governmental
-$ 318,000$ -$ 1,579,491$ 7,141,972$
- - - 275,445 275,445
- - - - 132,137
- - - - 2,532,789
754,264 - - 390,594 2,541,072
- - 530,661 1,207,082 1,994,941
- 52,023 - 36,668 457,606
- - - - 19,959
- 45,446 - 402,570 625,964
- 57,717 - 55,460 149,472
754,264 473,186 530,661 3,947,310 15,871,357
- - 120,933 - 1,479,856
- - - - 2,667,435
- - 409,728 26,500 1,640,892
- - - - 695,747
- - - 223,375 889,173
- 31,858 - 82,080 174,650
- - - 32,869 32,869
683,811 2,577,165 - 1,341,038 4,602,014
- - - 324,404 328,450
- - - - 1,330,000
- - - - 222,250
- - - - 65,483
683,811 2,609,023 530,661 2,030,266 14,128,819
70,453 (2,135,837) - 1,917,044 1,742,538
- 632,244 - 1,631,309 2,465,348
- - - - 2,950,000
- - - - 312,200
- - - - (3,170,000)
- - - (1,258,250) (2,202,979)
- 632,244 - 373,059 354,569
70,453 (1,503,593) - 2,290,103 2,097,107
(4,305,681) 3,017,835 - 12,433,952 17,013,766
(4,235,228)$ 1,514,242$ -$ 14,724,055$ 19,110,873$
35
CITY OF OTSEGO, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES (DEFICITS) OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2020
Total Net Change in Fund Balances - Governmental Funds 2,097,107$
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of
activities the cost of those assets is allocated over their estimated useful lives as depreciation.
Capital Outlays 2,895,582
Depreciation Expense (1,689,471)
Assets Contributed by Developers 1,204,854
Contributions of capital assets to the proprietary funds decrease net position in the statement of
activities, but do not appear in the governmental funds because they are not financial resources.(410,322)
In the statement of activities, only the gain on the sale of capital assets is reported. However,
in the governmental funds, the proceeds from the sale increase financial resources. Thus the
change in net position differs from the change in fund balance by the cost of the capital assets sold.(556)
The issuance of long-term debt provides current financial resources to governmental funds, while the
repayment of principal of long-term debt consumes the current financial resources of governmental
funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
the effect of issuance costs, premiums, discounts, and similar items when the debt is first issued,
whereas these amounts are deferred and amortized in the statement of activities.
Principal Repayments 4,500,000
Issuance of Debt (2,950,000)
Premium on Issuance of Debt (312,200)
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.40,031
Certain revenues are recognized as soon as they are earned. Under the modified accrual
basis of accounting, certain revenues cannot be recognized until they are available to
liquidate liabilities of the current period.
Property Taxes 28,896
Special Assessments (508,626)
In the statement of activities, personnel expenses are recognized as they are accrued, however
these expenses do not consume current financial resources, and under the modified accrual
basis of accounting, are not reported in the governmental funds until they are due.
Compensated Absences (10,442)
GERF Pension 8,131
Change in Net Position - Governmental Activities 4,892,984$
The notes to the financial statements are an integral part of this statement.
36
CITY OF OTSEGO, MINNESOTA
GENERAL FUND - STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Property Taxes 4,494,537$ 4,494,537$ 4,497,723$ 3,186$
Franchise Taxes 141,000 141,000 132,137 (8,863)
Licenses and Permits 1,086,220 1,086,220 2,532,789 1,446,569
Intergovernmental 75,000 75,000 1,396,214 1,321,214
Charges for Services 202,615 202,615 257,198 54,583
Special Assessments 4,600 4,600 5,434 834
Fines and Forfeitures 24,000 24,000 19,959 (4,041)
Investment Earnings (net) 83,000 83,000 177,948 94,948
Miscellaneous - - 36,295 36,295
Total Revenues 6,110,972 6,110,972 9,055,697 2,944,725
EXPENDITURES
Current
General Government 1,451,749 1,451,749 1,358,923 (92,826)
Public Safety 2,609,518 2,609,518 2,667,435 57,917
Public Works 1,347,106 1,347,106 1,204,664 (142,442)
Culture and Recreation 760,089 760,089 695,747 (64,342)
Economic Development 125,460 125,460 665,798 540,338
Capital Outlay
General Government 10,600 10,600 60,712 50,112
Public Works 3,450 3,450 - (3,450)
Culture and Recreation 4,700 4,700 4,046 (654)
Total Expenditures 6,312,672 6,312,672 6,657,325 344,653
Excess (Deficiency) of Revenues
Over (Under) Expenditures (201,700) (201,700) 2,398,372 2,600,072
OTHER FINANCING SOURCES (USES)
Transfers In 201,700 201,700 201,795 95
Transfers Out - - (932,244) (932,244)
Total Other Financing Sources (Uses)201,700 201,700 (730,449) (932,149)
Net Change in Fund Balance - - 1,667,923 1,667,923
Fund Balance - January 1 4,319,810 4,319,810 4,319,810 -
Fund Balance - December 31 4,319,810$ 4,319,810$ 5,987,733$ 1,667,923$
The notes to the financial statements are an integral part of this statement.
37
CITY OF OTSEGO, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
DECEMBER 31, 2020
Sanitary Storm
Water Sewer Water Total
Utility Utility Utility Enterprise
ASSETS
Current Assets
Cash and Cash Equivalents 7,902,926$ 14,622,021$ 425,462$ 22,950,409$
Receivables
Accounts 161,089 320,531 7,709 489,329
Special Assessments
Current - - 776 776
Delinquent - - 256 256
Due from Other Governments - 1,907,996 - 1,907,996
Prepaid Items 11,544 37,619 - 49,163
Total Current Assets 8,075,559 16,888,167 434,203 25,397,929
Noncurrent Assets
Special Assessments
Deferred 409,710 1,047,975 38,719 1,496,404
Capital Assets
Land 170,178 533,517 - 703,695
Buildings and Building Improvements 109,096 68,508 - 177,604
Machinery and Equipment 441,840 1,180,147 - 1,621,987
Infrastructure 25,008,736 37,729,989 5,039,029 67,777,754
Construction in Progress 601,005 9,871,387 147,409 10,619,801
Total Capital Assets 26,330,855 49,383,548 5,186,438 80,900,841
Less: Accumulated Depreciation (6,900,483) (12,594,643) (376,318) (19,871,444)
Net Capital Assets 19,430,372 36,788,905 4,810,120 61,029,397
Total Noncurrent Assets 19,840,082 37,836,880 4,848,839 62,525,801
Total Assets 27,915,641 54,725,047 5,283,042 87,923,730
DEFERRED OUTFLOWS OF RESOURCES
General Employees Retirement Plan Pension Resources 13,539 40,574 - 54,113
Total Deferred Outflows of Resources 13,539 40,574 - 54,113
LIABILITIES
Current Liabilities
Accounts Payable 55,493 2,246,921 2,917 2,305,331
Due to Other Governments 15,142 16,414 - 31,556
Accrued Salaries Payable 2,007 6,021 - 8,028
Accrued Interest Payable 15,632 61,116 - 76,748
Bonds Payable 867,600 1,542,400 - 2,410,000
Notes from Direct Borrowings - 130,866 - 130,866
Compensated Absences Payable 1,257 3,771 - 5,028
Total Current Liabilities 957,131 4,007,509 2,917 4,967,557
Noncurrent Liabilities
Bonds Payable (net)4,541,997 8,074,661 - 12,616,658
Notes from Direct Borrowings - 9,308,070 - 9,308,070
Compensated Absences Payable 5,028 15,083 - 20,111
General Employees Retirement Plan Net Pension Payable 80,864 242,328 - 323,192
Total Noncurrent Liabilities 4,627,889 17,640,142 - 22,268,031
Total Liabilities 5,585,020 21,647,651 2,917 27,235,588
DEFERRED INFLOWS OF RESOURCES
General Employees Retirement Plan Pension Resources 3,094 9,273 - 12,367
Total Deferred Inflows of Resources 3,094 9,273 - 12,367
NET POSITION
Net Investment in Capital Assets 14,020,775 17,732,908 4,810,120 36,563,803
Unrestricted 8,320,291 15,375,789 470,005 24,166,085
Total Net Position 22,341,066$ 33,108,697$ 5,280,125$ 60,729,888$
The notes to the financial statements are an integral part of this statement.
38
CITY OF OTSEGO, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Sanitary Storm
Water Sewer Water Total
Utility Utility Utility Enterprise
OPERATING REVENUES
Charges for Services 2,013,487$ 2,469,354$ 120,579$ 4,603,420$
OPERATING EXPENSES
Personal Services 138,533 415,340 12,945 566,818
Supplies 248,379 173,168 3,930 425,477
Insurance 10,514 35,245 - 45,759
Utilities 101,787 250,260 - 352,047
Services and Other Charges 161,691 514,639 26,540 702,870
Depreciation 628,728 1,026,089 95,570 1,750,387
Total Operating Expenses 1,289,632 2,414,741 138,985 3,843,358
Operating Income (Loss) 723,855 54,613 (18,406) 760,062
NONOPERATING REVENUES (EXPENSES)
Antenna Rental 80,068 - - 80,068
Intergovernmental 524 1,633 - 2,157
Property Taxes - - 32,000 32,000
Investment Earnings (net) 271,279 404,206 12,751 688,236
Miscellaneous Revenue 15,022 4,319 - 19,341
Interest and Fiscal Agent Fees (153,890) (324,778) - (478,668)
Total Nonoperating Revenues (Expenses) 213,003 85,380 44,751 343,134
Income Before Capital Contributions and Transfers 936,858 139,993 26,345 1,103,196
Connection Fees 1,857,643 5,570,535 - 7,428,178
Capital Contributions - Developer Assets 602,128 729,598 454,473 1,786,199
Capital Contributions - Governmental Funds 143,529 100,745 166,048 410,322
Transfers Out (62,564) (164,067) (35,738) (262,369)
Change in Net Position 3,477,594 6,376,804 611,128 10,465,526
Net Position - January 1 18,863,472 26,731,893 4,668,997 50,264,362
Net Position - December 31 22,341,066$ 33,108,697$ 5,280,125$ 60,729,888$
The notes to the financial statements are an integral part of this statement.
39
CITY OF OTSEGO, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Sanitary Storm
Water Sewer Water Total
Utility Utility Utility Enterprise
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 2,022,679$ 2,478,539$ 124,293$ 4,625,511$
Other Operating Receipts 105,614 5,952 - 111,566
Payments to Suppliers (491,500) (976,319) (27,606) (1,495,425)
Payments to Employees (130,801) (392,374) (12,945) (536,120)
Net Cash Flows Provided by Operating Activities 1,505,992 1,115,798 83,742 2,705,532
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Property Taxes - - 32,000 32,000
Principal Paid on Revenue Bonds (840,600) (1,494,400) - (2,335,000)
Interest Paid on Revenue Bonds (210,867) (392,745) - (603,612)
Transfers Out (62,564) (164,067) (35,738) (262,369)
Net Cash Flows Provided (Used) by Noncapital Financing Activities (1,114,031) (2,051,212) (3,738) (3,168,981)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (2,702,167) (7,009,682) - (9,711,849)
Note Proceeds from Direct Borrowings - 7,546,308 - 7,546,308
Connection Fees 1,664,275 4,792,831 - 6,457,106
Net Cash Flows Provided (Used) by Capital and Related Financing Activities (1,037,892) 5,329,457 - 4,291,565
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Investments 271,279 404,206 12,751 688,236
Net Increase (Decrease) in Cash and Cash Equivalents (374,652) 4,798,249 92,755 4,516,352
Cash and Cash Equivalents - January 1 8,277,578 9,823,772 332,707 18,434,057
Cash and Cash Equivalents - December 31 7,902,926$ 14,622,021$ 425,462$ 22,950,409$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Operating Income (Loss) 723,855$ 54,613$ (18,406)$ 760,062$
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Flows Provided by Operating Activities:
Depreciation 628,728 1,026,089 95,570 1,750,387
GERF Pension Activity 4,748 14,014 - 18,762
Other Income Related to Operations 95,614 5,952 - 101,566
(Increase) Decrease in Assets & Deferred Outflows of Resources:
Accounts Receivable 2,351 5,556 1,085 8,992
Special Assessments 6,841 - 2,629 9,470
Due from Other Governments 10,000 3,629 - 13,629
Prepaid Items (1,293) (4,245) - (5,538)
Increase (Decrease) in Liabilities & Deferred Inflows of Resources
Accounts Payable 26,819 (15,176) 2,864 14,507
Due to Other Governments 5,345 16,414 - 21,759
Accrued Salaries Payable 1,168 3,504 - 4,672
Compensated Absences Payable 1,816 5,448 - 7,264
Net Cash Flows Provided by Operating Activities 1,505,992$ 1,115,798$ 83,742$ 2,705,532$
NONCASH FINANCING ACTIVITIES
Amortization of Premium on Bonds Payable 55,299$ 98,310$ -$ 153,609$
Acquisition of Capital Assets on Account 17,813$ 2,216,405$ -$ 2,234,218$
Contribution of Capital Assets - Developer 602,128$ 729,598$ 454,473$ 1,786,199$
Contribution of Capital Assets - Governmental Funds 143,529$ 100,745$ 166,048$ 410,322$
The notes to the financial statements are an integral part of this statement.
40
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. REPORTING ENTITY
The City of Otsego, Minnesota (the City) was incorporated in 1990 after being an established township since 1858. The
City operates under the "Optional Plan A" form of government, as defined in Minnesota statutes. The governing body
of the City (City Council) consists of an elected Mayor, and four elected Council members, all of which are elected at-large
and serve four year staggered terms. The City Council exercises legislative authority and determines all matters of policy.
The financial statements of the City have been prepared in accordance with accounting principles generally accepted in
the United States of America (GAAP), as applied to governmental units by the Governmental Accounting Standards
Board (GASB).
The City includes all funds, organizations, institutions, agencies, departments, boards, and offices that are not legally
separate from the City. Component units are legally separate organizations for which the elected officials of the City are
financially accountable and are included within the basic financial statements of the City because of the significance of
their operational or financial relationships with the City.
The City is considered financially accountable for a component unit if it appoints a voting majority of the organization's
governing body and is able to impose its will on the organization by significantly influencing the programs, projects,
activities, or level of services performed or provided by the organization, or there is a potential for the organization to
provide specific financial benefits to, or impose specific financial burdens on, the City.
Blended component units, although legally separate, are, in substance, part of the government’s operations. A blended
component unit is reported as if it were a fund of the City throughout the year. It is included at both the government-wide
and fund financial reporting levels.
A description of the City’s blended component unit follows:
The City of Otsego Economic Development Authority (EDA) – The EDA is a legal entity separate from the City.
Although legally separate, the EDA is reported as if it were part of the primary government because the Board of
Commissioners is made up of the Mayor and four Council members and the City has operational responsibility over
the EDA. It is this criterion that results in the EDA being reported as a blended component unit within the primary
government, although there is currently no financial activity for the EDA. Separate financial statements would not be
prepared for the EDA, even if there was financial activity.
41
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
B. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
The government-wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all activities of the City and its component units. Governmental activities, which normally are supported
by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant
extent on 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 business-type activity and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or business-type activity. Taxes
and other items not included among program revenues are reported instead as general revenues .
Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental
funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The government-wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting , as are the proprietary fund financial statements. 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 year for which they are levied. Grants and similar items are recognized as
revenue as soon as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting . Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60
days of the end of the current fiscal year. Expenditures generally are recorded when a liability is incurred, as under accrual
accounting. However, debt service expenditures, compensated absences, as well as expenditures related to claims and
judgements, are recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current
fiscal year are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year.
Only the portion of special assessments receivable due within the current fiscal year is considered to be susceptible to accrual
as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
42
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
The City reports the following major governmental funds:
General Fund - This is the City's primary operating fund, and accounts for all of the general financial resources of
the City, except those required to be accounted for in another fund. Most of the current day-to-day operations of the
City are financed from this fund.
Debt Service Fund - This fund is used to account for the collection of property taxes, special assessments and other
resources which are used to repay the principal and interest on debt issued for various improvements in the City.
Municipal State-Aid for Construction Fund - This fund was established to account for the State allotment of
construction aid. The source of the State funding is provided for through collection of gasoline taxes. The funds
accumulated are used on transportation related construction projects.
Capital Improvements Fund - This fund was established to accumulate resources that may be used to internally
finance future City projects.
Development and Builder Escrows Fund - This fund was established to receipt funds and to account for the
expenditure of such funds, for costs associated within residential, commercial and industrial developments in the City.
The City reports the following major enterprise funds:
Water Utility Fund - This fund accounts for the operations of the public water utility system. The resources
accumulated are primarily from system user charges and system connection fees. The accumulated funds are then used
to pay for the operational costs of pumping and distributing water to the system customers. The fund also accumulates
resources to finance certain capital improvements and to pay the debt service associated with the water utility.
Sanitary Sewer Utility Fund - This fund accounts for the operations of the public sewer utility system. The resources
accumulated are primarily from system user charges and system connection fees. The accumulated funds are then used
to pay for the operational costs of collection and treatment of sewage from the system. The fund also accumulates
resources to finance certain capital improvements and to pay the debt service associated with the sewer utility.
Storm Water Utility Fund - This fund accounts for the operations of the storm water collection system. The resources
accumulated are primarily from system user charges and property taxes. The accumulated funds are then used to pay
for the operational costs of collection and treatment of surface water runoff that does not require treatment.
43
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements.
Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved
external organizations, such as buying goods and services or payments in lieu of taxes. Elimination of these charges would
distort the direct costs and program revenues reported for the various functions concerned.
Proprietary funds distinguish operating revenues and expenses from non-operating 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 enterprise funds are charges to customers for sales and services.
Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on
capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenue and expenses.
D. DEPOSITS AND INVESTMENTS
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and investments with a maturity of
three months or less when from the date of acquisition. All of the deposits and investments allocated to the proprietary funds
are considered to meet this criteria.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other authorized
investments. Earnings from such investments are allocated on the basis of applicable participation by each of the funds.
Minnesota statute §118A.04 governs the investment of public funds and outlines the allowable investment types. The City's
investment policy is more restrictive than statute, and authorizes the City to invest in the following:
a] Securities which are direct obligations or are guaranteed or insured issues of the United States, its agencies, its
instrumentalities, or organizations created by an act of Congress.
b] Shares of investment companies registered under the Federal Securities Act of 1940, and received the highest credit
rating and is rated in one of the two highest categories by at least one nationally recognized statistical rating agency.
c] Obligations of any state or local government with taxing powers rated "A" for general obligations or with a rating of
"AA" or better for revenue backed obligations, with the ratings being provided by a national bond rating service.
d] Commercial paper issued by a United States corporation or their Canadian subsidiaries that is rated in the highest quality
by at least two nationally recognized rating agencies.
e] Time deposits that are fully insured by the Federal Deposit Insurance Corporation.
Certain investments for the City are reported at fair value as disclosed in Note 3 (A). The City categorizes its fair value
measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based
on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for
identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.
In accordance with Governmental Accounting Standards Board (GASB) Statement No. 79, the Minnesota Municipal Investment
Pool (4M) securities are valued at amortized cost, which approximates fair value. There are no restrictions or limitations on
withdrawals from the 4M Liquid Asset Fund.
44
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
E. RECEIVABLES AND PAYABLES
Accounts Receivable
Receivables include amounts billed for services provided by the City before year-end. Receivables within the enterprise
funds do include unbilled charges for services provided from the middle of December to the end of the year, as the City
bills for those services mid-month. The City currently has not established an allowance for doubtful accounts for either
trade or utility charge receivables. The City annually certifies unpaid trade and utility charge receivable to Wright County
for collection in the following year, and is the primary factor in reporting the receivables at a gross amount, rather than
net of allowance.
Property Taxes
The City Council annually adopts a property tax levy and certifies it to Wright County in December. The County allocates
this levy across taxable properties in the City based on valuations assessed in the prior year. These taxes become an
enforceable lien against the property on January 1st, and are recorded as receivables by the City as of that date.
Tax statements are generated and mailed by the County to the respective taxpayers, with half of the total due on May 15th
and the second half due on October 15th. The County is also the collecting agency, and remits the amounts collected to the
City with primary settlements in June and December, and a minor settlement in January.
Property taxes that are unpaid as of December 31st, are then classified as delinquent. Delinquent taxes receivable include
the past six years of uncollected taxes and are fully offset by a deferred inflow of resources for those collections not
received within 60 days of year-end in the governmental fund financial statements.
Special Assessments
Special assessments represent the financing for public improvements paid for by benefiting property owners. These
assessments are recorded as receivables upon certification to the County. Special assessments have been offset by a
deferred inflow of resources for those collections not received within 60 days after year end in the governmental fund
financial statements.
Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds for goods provided or services
rendered. Short-term interfund loans are classified as “due to/from other funds.” All short-term interfund receivables and
payables at December 31, 2020 are planned to be eliminated in 2021. Long-term interfund loans are classified as
“advances 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".
F. PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both
government-wide and fund financial statements. Prepaid items are reported using the consumption method and recorded as
expenditures/expenses at the time of consumption rather than when purchased.
G. ASSETS HELD FOR RESALE
Assets held for resale represent various parcels of land that are currently owned by the City with the intent to sell in the future
to create economic development activity within the City. The assets are reported at their net realizable value in the General
fund. During the year ended December 31, 2020, management has reviewed the reported values of the assets.
45
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
H. CAPITAL ASSETS
Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, sidewalks, and similar items)
and intangible assets such as easements and computer software, are reported in the applicable governmental or business-type
activities columns in the government-wide financial statements and the proprietary fund financial statements. Capital assets are
defined by the City as assets with an initial, individual cost in excess of the amounts in the table below and with an estimated
useful life in excess of three years. All land assets are recorded by the City with no assigned cost threshold. Such assets are
recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at
acquisition value at the date of donation.
Infrastructure $ 100,000
Buildings and Building Improvements 50,000
Land Improvements 25,000
Machinery and Equipment 5,000
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not
capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during
the construction phase of capital assets of business-type activities is included as part of the capitalized value of the
assets constructed . For the year ended December 31, 2020 no interest was capitalized in connection with construction
in progress.
Capital assets of the City, are depreciated using the straight line method over the following estimated useful lives:
Infrastructure 25 - 40 years
Buildings and Building Improvements 10 - 40 years
Land Improvements 5 - 20 years
Machinery and Equipment 3 - 15 years
I. DEFERRED OUTFLOWS OF RESOURCES
In addition to assets, the statement 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 a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The
City presents deferred outflows of resources on the Statement of Net Position for deferred outflows of resources related to
pensions for various estimate differences that will be amortized and recognized over future years.
J. COMPENSATED ABSENCES
It is the City's policy to permit employees to accumulate earned but unused personal time-off (PTO) benefits. All PTO pay is
accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is
reported in governmental fund financial statements only if they have matured, for example, as a result of an employee
retirement or resignation. The General fund is typically used to liquidate the compensated absences payable for governmental
activities.
46
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
K. LONG TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and
other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or
proprietary fund type statement of net position. Bond premiums and discounts are amortized over the life of the bonds using
the straight line method. Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance
costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on
debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses.
Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
L. PENSIONS
For purposes of measuring the net pension liability, deferred outflows of resources, deferred inflows of resources, and
pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and
additions to or deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by
PERA except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer
payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit
terms. Investments are reported at fair value. The General fund is typically used to liquidate the net pension liability for
governmental activities. The Water Utility and Sanitary Sewer Utility funds would be used to liquidate the net pension liability
for business-type activities.
M. POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
In June 2015, the Governmental Accounting Standards Board (GASB) issued Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions. The primary objective of this Statement was to improve
accounting and financial reporting for postemployment benefits other than pensions (OPEB). The City has no plans that would
result in an OPEB liability and, therefore, the City anticipates it will not incur any future explicit or implicit OPEB costs for its
employees, and therefore, no liability will be recorded.
N. DEFERRED INFLOWS OF RESOURCES
In addition to liabilities, statements of financial position or balance sheets 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. One item, unavailable revenue, which arises only under a modified accrual basis
of accounting, therefore, is reported only in the governmental funds Balance Sheet. The governmental funds report unavailable
revenue from sources such as: property taxes and special assessments not collected within 60 days of year-end. The statement
of net position and governmental funds also report deferred inflows of grants for subsequent years due to timing requirements
not being met at year-end. These amounts are deferred and recognized as an inflow of resources in the period the amounts
become available. The second item presented by the City are deferred inflows of resources on the Statement of Net Position
for deferred inflows of resources related to pensions for various estimate differences that will be amortized and recognized
over future years.
47
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
O. FUND EQUITY
Fund equity in the fund financial statements is classified as fund balance for governmental funds and net position for
proprietary funds. Fund equity in the government-wide financial statements is classified as net position for both
governmental and business-type activities.
Fund Balance – In the fund financial statements, governmental funds report fund balance in classifications that disclose
restraints for which amounts in those funds can be spent. These classifications are as follows:
Nonspendable – consists of amounts that are not in spendable form or are required to be maintained intact.
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. These constraints are imposed by formal action (resolution)
of the City Council, which is the highest level of decision making authority.
Assigned – consists of internally imposed constraints. These constraints reflect the specific purpose for which it is
the City’s intended use. These constraints are established by the City Council or, pursuant to council resolution, the
City Administrator or the Finance Director.
Unassigned – is the residual classification for the General fund and also reflects negative residual amounts in other
funds.
When committed, assigned, or unassigned resources are available for an allowable use, it is the City’s policy to use
resources in the following order; 1) committed, 2) assigned, and 3) unassigned.
The City has formally adopted a fund balance policy for the General Fund. The policy establishes a year-end target
fund balance amount of 45% of the next year’s operating budget for cash flow needs.
Net Position – Net position represents the difference between assets, deferred outflows of resources, liabilities and
deferred inflows of resources. Net position can be displayed in the three following classifications:
Net Investment in Capital Assets – consists of capital assets, net of accumulated depreciation, and further reduced by
the outstanding balance of any long-term debt used to build or acquire the respective capital assets.
Restricted – reported when there are limitations of use through external restrictions imposed by creditors, grantors,
or laws and regulations of other governments.
Unrestricted – all remaining net position is reported in this classification.
When both restricted and unrestricted net position are available for an allowable use, it is the government’s policy to
use restricted resources first, then unrestricted resources as they are needed.
48
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
P. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America (GAAP), requires management to make estimates and assumptions that affect amounts reported in the financial
statements and accompanying notes. Actual results could differ from such estimates.
Q. BUDGETARY INFORMATION
An annual budget is adopted on a basis consistent with accounting principles generally accepted in the United States of
America (GAAP) for the General fund, the Debt Service fund, and the Revolving Loan, Tax Increment District No. 1, and
Tax Increment District No. 3 special revenue funds. All annual appropriations lapse at year-end. The City does not use
encumbrance accounting.
In June of each year, General fund departments submit requests for appropriations to the City Administrator so that a budget
may be prepared. The requested budget appropriations are presented and reviewed with the City Council. The proposed
General fund budget and preliminary property tax levy must be certified to Wright County prior to September 30. The City
Council holds public hearings and a final budget is adopted in early December, with the final property tax levy required to be
certified to Wright County prior to the end of December.
The appropriated budget is prepared by fund and department. The City's department heads are authorized to make transfers of
budgeted appropriations within a department. Any transfers of appropriations between a department needs authorization of the
City Administrator. The legal level of budgetary control is at the fund level, so any appropriations transfers between funds needs
needs the approval of the City Council. There were no transfers of budgeted appropriations or budget amendments during
the year.
49
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
Budgetary control for governmental funds is established by each fund's total appropriations. Expenditures exceeded
appropriations in the following funds for the year ending December 31, 2020:
Appropriations Expenditures
Major Governmental Funds:
General 6,312,672$ 6,657,325$
The variance with the budget in the General fund was impacted by the COVID-19 pandemic which resulted in the City
having expenditures in excess of the budget within the Public Safety, Economic Development and General Government Capital
Outlay functions. The variance for these expenditures were offset by additional intergovernmental revenue from the
Coronavirus Relief Fund which was establised by the CARES Act.
B. DEFICIT FUND EQUITY
Deficit fund equity exists at December 31, 2020 in the following fund:
Major Governmental Funds:
Capital Project Funds
MSA Construction 4,235,228$
The deficit is being funded through internal borrowing. The MSA Construction fund deficit will be repaid with State-Aid
funding from 2021 through 2025, which has been advanced to the City for the 85th Street and Maciver Avenue street extension
project.
50
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 3 DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
In accordance with Minnesota Statutes, the City maintains deposits at only those depository banks authorized by the
City Council. All such depositories are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits with financial institutions be protected by federal deposit insurance, corporate
surety bonds or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance
or bonds. Minnesota Statutes require that all securities pledged as collateral be placed 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.
At year-end, the City's carrying amount of deposits was $1,507,704, and a bank balance of $1,680,424.
Custodial credit risk for the City's deposits would arise in the event of a bank failure, where the City's deposits may not be
returned to it. As of year-end, the City's bank balance was not exposed to custodial credit risk because it was insured and fully
collateralized with securities held by the pledging financial institution's trust department or agent in the City's name.
As of December 31, 2020 the City had the following investments:
Fair Value < 1 1 - 3 3 - 5
Negotiable Certificates of Deposit 22,538,819$ 4,240,674$ 14,299,150$ 3,998,995$
U.S. Government Agency Securities 11,446,908 3,466,190 5,699,463 2,281,255
Municipal Bonds 4,045,424 3,025,231 1,020,193 -
External Investment Pool 10,968,543 10,968,543 - -
Brokered Money Market Accounts 994,878 994,878 - -
Total 49,994,572$ 22,695,516$ 21,018,806$ 6,280,250$
The external investment pool and brokered money market investments are valued at amortized cost. All of the remaining City
investments have recurring fair value measurements using a matrix pricing model (level 2 inputs).
Investment Maturities (In Years)
Investment Type
51
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
As of December 31, 2020, the City's investments in U.S. Government Agency Securities and Municipal Bonds carried the
following ratings as well as their respective concentration percentage when compared to the total investment portfolio. An
indication of "NR" in the ratings below mean that the respective rating organization has not provided a rating on the respective
investment.
Moody's S & P Fair Portfolio
Rating Rating Value Concentration %
U.S. Government Agency Securities
Federal Farm Credit Bank (FFCB) Aaa AA+ 3,763,795$ 7.53%
Federal Home Loan Bank (FHLB) Aaa AA+ 4,188,465 8.38%
Federal Home Loan Mortgage Corporation (FHLMC) Aaa AA+ 900,763 1.80%
Federal National Mortgage Association (FNMA) Aaa AA+ 2,593,885 5.19%
Total 11,446,908$ 22.90%
Municipal Bonds
Swift County, Minnesota NR AA- 325,390 0.65%
City of Oklahoma City, Oklahoma Aaa AAA 501,950 1.00%
State of California Aa2 AA- 501,555 1.00%
Pinckney School District, Michigan NR AA 175,576 0.35%
Milan School District, Michigan NR AA 508,020 1.02%
State of Connecticut A1 A 503,855 1.01%
Milwaukee County, Wisconsin Aa2 AA 508,885 1.02%
City of Bloomington, Minnesota NR AAA 161,358 0.32%
City of Minneapolis, Minnesota NR AAA 858,835 1.72%
Total 4,045,424$ 8.09%
The following is a summary of total deposits and investments as of December 31, 2020 and presented in the basic financial
statements in the Statement of Net Position:
Deposits 1,507,704$
Investments 49,994,572
Petty Cash and Change Funds 600
Total 51,502,876$
Investment Type
52
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Interest Rate Risk – This is the risk that the market values of the securities in the City's investment portfolio would decrease
due to changes in market interest rates. The City identifies interest rate risk within the second and fourth objectives of the City's
investment policy, which are liquidity and return on investment. The City attempts to limit its exposure to interest rate risk by
keeping the investment portfolio sufficiently liquid to meet cash flow requirements, while still attempting to obtain a reasonable
return on investment. The City also addresses interest rate risk by attempting to create proportions in the maturities of the City's
investment portfolio which places longer term investments higher on the yield curve than those shorter term investments.
Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Minnesota
Statutes limits allowable investments to those that are in the top two ratings issued by nationally recognized statistical rating
organizations. The City's investment policy also addresses credit risk by further limiting investments to the list provided
within Note 1-D.
Concentration of Credit Risk – This is the risk of loss attributed to the magnitude of the City's investment in any single issuer.
The first objective of the City's investment policy is safety. To obtain this objective, diversification is to be considered in the
type of investment, maturity and the issuer of the respective investments. Each of the City's certificates of deposit are
purchased in amounts not exceeding federal deposit insurance. The tables above outline the concentrations of the City's other
investment types, including U.S. Government Agency Securities and Municipal Bonds.
More than 5 percent of the City's investments are in Federal Farm Credit Bank (FFCB), Federal Home Loan Bank (FHLB),
Federal National Mortgage Assocation (FNMA) and the Minnesota Municipal Investment Pool (4M). These investments are
7.53 percent, 8.38 percent, 5.19 percent, and 21.94 percent respectively, of the City's total investments.
Custodial Credit Risk – This is the risk that in the event of the failure of a counterparty to an investment, the City will not be
able to recover the value of an investment or collateral securities that are in possession of an outside party. In accordance with
the City's investment policy, all investment securities shall be held by a single safekeeping agent in the name of the City.
53
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
B. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2020 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, not Being Depreciated:
Land 3,840,461$ 437,700$ -$ 4,278,161$
Construction in Progress 6,038,505 1,024,211 (6,266,155) 796,561
Total Capital Assets, not Being Depreciated 9,878,966 1,461,911 (6,266,155) 5,074,722
Capital Assets, Being Depreciated:
Buildings and Building Improvements 6,562,050 - - 6,562,050
Land Improvements 6,661,527 - - 6,661,527
Machinery and Equipment 4,042,601 267,422 (33,332) 4,276,691
Infrastructure 26,110,048 8,226,936 - 34,336,984
Total Capital Assets, Being Depreciated 43,376,226 8,494,358 (33,332) 51,837,252
Less Accumulated Depreciation for:
Buildings and Building Improvements 2,082,948 161,149 - 2,244,097
Land Improvements 2,883,060 264,758 - 3,147,818
Machinery and Equipment 2,078,526 337,830 (32,776) 2,383,580
Infrastructure 7,458,493 925,734 - 8,384,227
Total Accumulated Depreciation 14,503,027 1,689,471 (32,776) 16,159,722
Total Capital Assets Being Depreciated - Net 28,873,199 6,804,887 (556) 35,677,530
Governmental Activities Capital Assets - Net 38,752,165$ 8,266,798$ (6,266,711)$ 40,752,252$
Depreciation expense was charged to the functions of the City as follows:
Governmental Activities:
General Government 24,946$
Public Safety 5,750
Public Works 1,258,329
Culture and Recreation 400,446
Total Depreciation Expense - Governmental Activities 1,689,471$
54
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities:
Capital Assets, not Being Depreciated:
Land 631,739$ 71,956$ -$ 703,695$
Construction in progress 3,771,825 10,320,440 (3,472,464) 10,619,801
Total Capital Assets, not Being Depreciated 4,403,564 10,392,396 (3,472,464) 11,323,496
Capital Assets, Being Depreciated:
Buildings and Building Improvements 177,604 - - 177,604
Machinery and Equipment 1,491,270 130,717 - 1,621,987
Infrastructure 60,908,885 6,868,869 - 67,777,754
Total Capital Assets, Being Depreciated 62,577,759 6,999,586 - 69,577,345
Less Accumulated Depreciation for:
Buildings and Building Improvements 16,173 10,698 - 26,871
Machinery and Equipment 439,795 130,384 - 570,179
Infrastructure 17,665,089 1,609,305 - 19,274,394
Total Accumulated Depreciation 18,121,057 1,750,387 - 19,871,444
Total Capital Assets Being Depreciated - Net 44,456,702 5,249,199 - 49,705,901
Business-type Activities Capital Assets - Net 48,860,266$ 15,641,595$ (3,472,464)$ 61,029,397$
Depreciation expense was charged to the functions of the City as follows:
Business-type Activities:
Water Utility 628,728$
Sanitary Sewer Utility 1,026,089
Storm Water Utility 95,570
Total Depreciation Expense - Business-type Activities 1,750,387$
55
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
C. CONSTRUCTION COMMITMENTS
At December 31, 2020 the City had construction project contracts in progress. The commitments related to remaining contract
balances are summarized as follows:
Contract Remaining
Amount Commitment
Water Utility
70th Street Trunk Watermain to Tower No. 4 362,843 6,590
Sanitary Sewer Utility
East WWTF Biosolids Building 13,962,271$ 6,166,347$
Lift Station No. 7 223,115 9,935
Total 14,185,386 6,176,282
Capital Improvements
Parkview Avenue & 88th Street 881,162 54,068
Park Development
Prairie Park Pickleball Courts 151,223 9,478
Total 15,580,614$ 6,246,418$
D. INTERFUND BALANCES AND TRANSFERS
At December 31, 2020, the composition of balances for due to/from other funds of the City were as follows:
Due from Due to
Other Funds Other Funds
Major Governmental Funds:
Capital Improvements 321,401$ -$
MSA Construction - 321,401
Total 321,401$ 321,401$
Interfund due to/from balances are representative of lending/borrowing arrangements to cover deficit cash balances at the end
of the fiscal year. The balance in the Municipal State-Aid for Construction fund will be repaid with State-Aid funding for the
85th Street and Maciver Avenue extension projects.
Fund
Fund & Project
56
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Transfers between funds made during the year ended December 31, 2020 were as follows:
Transfer In Transfer Out
Major Governmental Funds:
General 201,795$ 932,244$
Debt Service - 12,485
Capital Improvments 632,244 -
Nonmajor Governmental Funds:
Pavement Management 1,111,482 -
Trails Management 200,000 -
Park Development - 79,253
Parks Capital Equipment 80,000 -
Community Facilities 79,253 80,000
Collector Streets - 1,071,128
Odean Improvements - 5,075
Slabtown Improvements - 22,794
Kadler Avenue Improvements 60,574 -
City Buildings & Property Maintenance 100,000 -
Total Governmental Funds 2,465,348 2,202,979
Major Proprietary Funds:
Water Utility - 62,564
Sanitary Sewer Utility - 164,067
Storm Water - 35,738
Total Proprietary Funds - 262,369
Total All Funds 2,465,348$ 2,465,348$
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services provided by
another fund or to provide additional capital and infrastructure funding. In addition, interfund transfers are occasionally
authorized to allow redistribution of resources between funds for the most efficient use of funds. In 2020, the following
transfers were made between funds:
• The General fund transferred $632,244 to the Capital Improvements fund; $200,000 to the Trails Management fund;
and $100,000 to the City Buildings & Property Maintenance fund. These transfers were in accordance with the City's
fund balance policy, where any balance exceeding the minimum fund balance is set aside for future capital items.
• The Water Utility and Sanitary Sewer Utility funds transferred $50,449 and $151,346 respectively to the General
fund as an annual contribution to help manage the property tax levy.
• The Water Utility, Sanitary Sewer Utility, and Storm Water Utility funds transferred $12,115, $12,720, and $35,738
respectively to the Kadler Avenue Improvements fund to contribute a portion of the project costs.
• The remainder of the interfund transfers were to close out funds that no longer serve a purpose.
Fund
57
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
E. LONG-TERM DEBT
Governmental Activities
The City issued general obligation bonds to provide funding for the acquisition and construction of major capital facilities
and construction of infrastructure in the governmental activities. General obligation bonds have also been issued to
refinance general obligation improvement bonds, which were originally intended to be fully repaid with collections of
special assessments. All long-term indebtedness outstanding is backed by the full faith and credit of the City. Bonds in the
governmental activities will be retired with future property tax levies and collections of special assessments. In the event
that a deficiency exists because of unpaid or delinquent taxes or special assessments at the time a debt service payment is
due, the City must provide resources to cover the deficiency until other resources are available. At the end of the current
year, there are $3,121,363 of assets accumulated in the debt service funds for future debt service. Included within those
accumulated assets, there are $966 of delinquent special assessments receivable, of which collection is uncertain.
Final
Interest Issue Maturity Original Payable
Rates Date Date Issue 12/31/20
General Obligation Bonds:
Refunding Bonds, Series 2010B 2.00 - 3.00% 11/30/2010 12/1/2021 3,705,000$ 480,000$
Refunding Bonds, Series 2012A 2.00% 3/14/2012 12/1/2021 1,400,000 195,000
Improvement Bonds, Series 2018A 3.00 - 3.13% 7/11/2018 2/1/2034 2,305,000 2,135,000
Refunding Bonds 2020A 1.03 - 1.11% 11/17/2020 2/1/2028 2,950,000 2,950,000
Total - Bonded Indebtedness 10,360,000$ 5,760,000
Other Liabilities:
Unamortized Premium on Issuance of Bonds 369,492
Compensated Absences Payable 102,331
Total Governmental Activities 6,231,823$
58
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Annual debt service requirements to maturity for governmental activities long-term indebtedness are as follows:
Principal Interest
1,360,000$ 153,062$
660,000 144,431
685,000 119,406
460,000 98,406
480,000 81,556
1,845,000 159,231
270,000 17,147
5,760,000$ 773,239$
In November 2020, the City issued $2,950,000 of General Obligation Improvement Refunding Bond, Series 2020A for the
current refunding of the General Obligation Improvement Refunding Bond, Series 2010D and the General Obligation
Improvement Crossover Refunding Bond, Series 2011A. The refunding was done to take advantage of lower interest
rates. The refunding resulted in a decrease of future debt service payments of $182,257. The net present value cash flow
savings from this transaction was $177,619.
2026 - 2030
General Obligation Bonds
2023
2024
2025
Year Ending
December 31
2021
2022
Governmental Activities
2031 - 2034
Total
59
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Business-type Activities
The City issued general obligation bonds to provide funding for the acquisition and construction of major capital facilities
and construction of infrastructure in the business-type activities. All long-term indebtedness outstanding is backed by the
full faith and credit of the City. Bonds in the business-type activities will be retired with the net revenues of the Water and
Sanitary Sewer funds. (Net revenues are defined as the excess of gross revenues and earnings over the normal, reasonable
and current costs of operating and maintenance). In the event that a deficiency exists because of inadequate net revenues
at the time a debt service payment is due, the City must provide resources to cover the deficiency until other resources are
available. At the end of the current year, the Water and Sanitary Sewer funds provided net revenues of $8,206,646, which
accounts for a debt-service coverage ratio of 279.27%.
Final
Interest Maturity Original Payable
Rates Date Date Issue 12/31/20
General Obligation Bonds:
Revenue Bonds, Series 2010C 2.00 - 5.00% 11/30/2010 12/1/2026 21,300,000$ 10,580,000$
Revenue Bonds, Series 2019A 4.00 - 4.00% 12/19/2019 12/1/2026 3,525,000 3,525,000
Note from Direct Borrowing:
G.O. PFA Revenue Note, 2020 1.16% 4/27/2020 8/20/1940 17,199,866 9,438,936
Sub-Total 42,024,866$ 23,543,936
Other Liabilities:
Unamortized Premium on Issuance of Bonds 921,658
Compensated Absences Payable 25,139
Total Business-type Activities 24,490,733$
60
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Annual debt service requirements to maturity for business-type activities long-term indebtedness are as follows:
Principal Interest Principal Interest
2,410,000$ 521,050$ 130,866$ 136,699$
2,550,000 400,550 808,000 198,171
2,650,000 322,775 817,000 188,790
2,165,000 239,300 827,000 179,305
2,125,000 164,363 837,000 169,703
2,205,000 83,880 4,330,000 700,547
- - 4,588,000 443,258
- - 4,862,000 170,655
14,105,000$ 1,731,918$ 17,199,866$ 2,187,128$
In April 2020, the City issued $17,199,866 of General Obligation PFA Revenue Note, Series 2020 for the purpose of
financing the eligible projects costs of the Clean Water State Revolving Fund project to construct a Biosolids Building at
the East Wastewater Treatment Facility. The aggregate principal amount of the loan disbursed and outstanding will bear
interest at the rate of 1.16 percent per annum accruing from and after the date of the Note, which is April 27, 2020, through
the date on which no principal of the loan remains unpaid and all accrued interest and servicing fees have been paid.
The annual debt service requirements to maturity presented are based on the final projected costs and debt authorized by
the Minnesota Public Facilities Authority. The balance of the debt represents costs incurred through December 31, 2020.
Interest will be payable beginning on February 20, 2021, with regular interest and principal payments every six months
thereafter on a semi-annual basis. This is projected to continue until August 20, 2040, if all amounts are disbursed as
projected, and all payments are made on a timely basis.
2026 - 2030
2036 - 2040
Business-type Activities
General Obligation Bonds
Total
Business-type Activities
2022
2023
2024
2025
Year Ending Note from Direct Borrowing
December 31
2021
2031 - 2035
61
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2020 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
General Obligation Bonds 7,310,000$ 2,950,000$ (4,500,000)$ 5,760,000$ 1,360,000$
Unamortized Bond Premium 68,641 312,200 (11,349) 369,492 -
Compensated Absences 91,889 128,802 (118,360) 102,331 20,466
Total - Governmental 7,470,530 3,391,002 (4,629,709) 6,231,823 1,380,466
Business-type Activities:
General Obligation Bonds 16,440,000 - (2,335,000) 14,105,000 2,410,000
Notes from Direct Borrowings - 9,438,936 - 9,438,936 130,866
Unamortized Bond Premium 1,075,267 - (153,609) 921,658 -
Compensated Absences 17,875 33,433 (26,169) 25,139 5,028
Total - Business-type 17,533,142 9,472,369 (2,514,778) 24,490,733 2,545,894
Grand Total Long-Term Liabilities 25,003,672$ 12,863,371$ (7,144,487)$ 30,722,556$ 3,926,360$
The General fund is typically used to liquidate the compensated absences payable for governmental activities.
F. CONDUIT DEBT OBLIGATIONS
Conduit debt obligations are certain limited-obligation revenue bonds or similar instruments issued for the express purpose of
providing capital financing for a specific third party. The City has issued various revenue bonds to provide funding to private
sector entities for projects deemed to be in the public interest. Although these bonds bear the name of the City, the City has no
obligation for such debt. Accordingly, the bonds are not reported as liabilities in the financial statements of the City.
As of December 31, 2020, the City's conduit debt consisted of the following:
Guardian Angels Senior Services
Revenue Bonds, Series 2017 29,320,000$
Guardian Angels Senior Services
Revenue Refunding Bonds, Series 2017A 9,420,000
Revenue Refunding Bonds, Series 2017B 5,730,000
Kaleidoscope Charter School
Revenue Bonds, Series 2014A 14,705,000
62
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
G. TAX ABATEMENTS
The City has entered into certain agreements for economic development purposes to either attract new businesses or retain
existing business operations within the City. The authority for the City to enter into such agreements comes from Minnesota
Statute §469. The City further has an established Business Subsidy Policy that provides evaluation criteria for any business
subsidy requests. As of December 31, 2020, the City has entered into two types of agreements.
Property Tax Abatements
For the year ended December 31, 2020, the City abated property taxes totaling $54,985. Details of each agreement and
the abatement for the current year are as follows:
• The City has entered into a tax abatement agreement with Duke Realty for land acquisition costs paid by the developer
that ultimately allowed for the City to construct street infrastructure within the Gateway North industrial park. The
agreement outlines that 50 percent of taxes payable in 2016-2022 will be abated by the City, to a maximum value
of $340,000. The abatement amounted to $54,985 in the current year.
• The City has entered into a tax abatement agreement with Wright County in order to finance the cost of Parkview
Avenue and 88th Street improvements which facilitated the Parkview Retail development. The agreement outlines
that the City will use tax abatement financing in an amount not to exceed $950,000 to reimburse the costs of the public
improvements. Wright County will use tax abatement financing in an amount not to exceed $400,000 to reimburse the
City for a portion of the costs of the public improvements. This abatement will begin with taxes payable 2022.
63
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Tax Increment Financing
For the year ended December 31, 2020, the Tax Increment Financing Districts within the City generated increment in the
amount of $275,445 and payments to the developers in the amount of $163,565. Details of each agreement are as follows:
• Tax Increment Financing District No. 1 was established in 2015 for the purpose of promoting industrial development
on a parcel owned by the City which had been obtained through the tax forfeiture process. The parcel would not have
been developed but-for tax increment financing given the existing special assessments and the extraordinary amount
of soil improvements. Under the agreement, up to $694,487 of costs incurred by the developer will be reimbursed
through a tax increment revenue note, payable beginning in 2018 and concluding in 2027. Payments on the tax
increment revenue note are only made to the extent of increment generated by the district. For 2020, this tax increment
financing district generated increment in the amount of $98,016 and payments to the developer in the amount
of $87,946.
• Tax Increment Financing District No. 3 was established in 2017 for the purpose of facilitating the development of a
142 unit senior housing facility, consisting of independent living, assisted living and memory care. The tax increment
district is a housing district, and is intended for occupancy, in part, by persons or families of low and moderate income.
In order to qualify as a housing district, the senior housing facility is required to provide at least 20% of the residential
units to persons whose incomes do not exceed 50% of the County median income. By providing the affordable housing,
the City believes that such a project was in the best interests of the City and its residents and agreed to reimburse the
developer the lesser of $2,389,400 or the costs of the site improvements actually incurred. The reimbursements will be
made through a tax increment revenue note, payable beginning in 2020 and concluding in 2047. Payments of the tax
increment revenue note are only made to the extent of increment generated by the district. For 2020, this tax increment
financing district generated increment in the amount of $168,042 and payments to the developer in the amount
of $75,619.
• Tax Increment Financing District No. 4 was established in 2018 for the purpose of facilitating the redevelopment of an
existing site including the decommissioning of a private wastewater treatment facility. The redevelopment of this site
will facilitate the construction of 164 units of market-rate multifamily housing, a mini-storage facility, and will create
shovel ready sites for approximately 15,000 square feet of future commercial retail development. The City determined
this development will ultimately preserve and enhance the tax base, redevelop sub-standard areas and provide
employment opportunities within the City that would not reasonably be expected to occur solely through private
investment within the forseeable future. Under the agreement, up to $3,359,685 of costs incurred by the developer will
be reimbursed through a tax increment revenue note, payable beginning in 2021 and concluding in 2046. Payments on
the tax increment revenue note are only made to the extent of increment generated by the district. For 2020, this tax
increment financing district generated increment in the amount of $9,387.
64
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
H. FUND EQUITY
Net position reported in the government-wide statement of net position at December 31, 2020 include the following:
Governmental Activities
Net Investment in Capital Assets:
Cost of Capital Assets 56,911,974$
Less: Accumulated Depreciation (16,159,722)
Less: Related Long-Term Debt Outstanding (6,129,492)
Total Net Investment in Capital Assets 34,622,760
Restricted for Tax Increment Financing 146,354
Restricted for Debt Service
Fund Balance - Governmental Fund Financial Statements 1,120,071
Add: Unavailable Revenue - Special Assessments 2,000,488
Less: Accrued Interest Payable (44,490)
Total Restricted for Debt Service 3,076,069
Restricted for Park Development
Fund Balance - Governmental Fund Financial Statements 4,206,129
Add: Unavailable Revenue - Special Assessments 16,870
Total Restricted for Park Development 4,222,999
Unrestricted 13,214,418
Total Governmental Activities Net position 55,282,600$
Business-type Activities
Net Investment in Capital Assets:
Cost of Capital Assets 80,900,841$
Less: Accumulated Depreciation (19,871,444)
Less: Related Long-Term Debt Outstanding (24,465,594)
Total Net Investment in Capital Assets 36,563,803
Unrestricted 24,166,085
Total Business-type Activities Net Position 60,729,888$
65
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
Aggregated funds balances reported in the governmental funds balance sheet at December 31, 2020 include the following:
Governmental Funds
Nonspendable Restricted Committed Assigned
General Fund
Prepaid Items 132,746$ -$ -$ -$
Assets Held for Resale 202,200 - - -
Insurance Deductibles - - - 214,743
Educational Programs - - - 28,042
Debt Service
Debt Service - 1,120,071 - -
Capital Improvements
City Buildings & Infrastructure - - - 1,514,242
Nonmajor Governmental Funds
Park Development - 4,206,129 - -
Street Light Replacement - 99,193
Business Development Loans - - 385,389 -
Tax Increment Financing - 146,354 - -
City Buildings & Infrastructure - - - 9,282,191
City Parks - - - 604,799
Total Fund Balances 334,946$ 5,472,554$ 484,582$ 11,644,017$
66
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 4 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.
Property and casualty insurance is provided through the League of Minnesota Cities Insurance Trust (LMCIT), a public entity
risk pool currently operating as a common risk management and insurance program. The City pays an annual premium to the
LMCIT for its insurance coverage. The LMCIT is self-sustaining through member premiums and reinsures through commercial
companies for excess claims. The City is covered through the pool for any claims incurred but unreported, however, retains
risk for the deductible portions of the insurance policies. The amount of those deductibles is considered immaterial to the
financial statements.
Workers’ compensation coverage is provided through a pooled self-insurance program through the LMCIT. The respective
insurance policy is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is
known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. This
coverage is not subject to a deductible.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for
any of the past three years.
The City is subject to certain legal claims in the normal course of business. Management does not expect the resolution of
these claims will have a material impact on the City’s financial condition or results of operations.
67
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 5 PENSION PLAN
Public Employee's Retirement Association
A. PLAN DESCRIPTION
The City participates in the following cost-sharing multiple-employer defined benefit pension plan administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and
administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax
qualified plans under Section 401(a) of the Internal Revenue Code.
General Employees Retirement Plan
All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees
Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
B. BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be
modified by the state Legislature. Vested, terminated employees who are entitled to benefits but are not receiving them yet are
bound by the provisions in effect at the time they last terminated their public service.
General Employees Plan 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 or service. Two methods are used to compute benefits for PERA's Coordinated Plan members. The
retiring member, if hired prior to July 1, 1989, receives the higher of a step-rate benefit accrual formula (Method 1) or level
accrual formula (Method 2), which is used for members hired after June 30, 1989. Under Method 1, the accrual rate for a
Coordinated Plan member is 1.2 percent for each of the first ten years of service and 1.7 percent for each additional year.
Under Method 2, the accrual rate for Coordinated members is 1.7 percent for all years of service. For members hired prior
to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For
members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped
at 66.
Benefit increases are provided to benefit recipients each January. Beginning in 2019, the postretirement increase is equal
to 50 percent of the cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1
percent and a maximum of 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year
as of the June 30 before the effective date of the increase will receive the full increase. For recipients receiving the annuity
or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will
receive a reduced prorated increase. For members retiring on January 1, 2024, or later, the increase will be delayed until
normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989).
Members retiring under Rule of 90 are exempt for the delay to normal retirement.
68
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
C. CONTRIBUTIONS
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be
modified by the state Legislature.
General Employees Fund Contributions
Coordinated Plan members were required to contribute 6.5 percent of their annual covered salary in fiscal year 2020 and
the City was required to contribute 7.5 percent for Coordinated Plan members. The City's contributions to the General
Employees Fund for years ended December 31, 2020, 2019 and 2018 were $133,158, $120,583, and $110,473. The City's
contributions were equal to the required contributions as set by state statute.
D. PENSION COSTS
General Employees Fund Pension Costs
At December 31, 2020, the City reported a liability of $1,480,878 for its proportionate share of the General Employees
Fund's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution
of $16 million. The State of Minnesota is considered a non-employer contributing entity and the State's contribution meets
the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability
associated with the City totaled $45,554. The net pension liability was measured as of June 30, 2020, and the total pension
liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's
proportionate share of the net pension liability was based on the City's contributions received by PERA during the
measurement period for employer payroll paid dates from July 1, 2019 through June 30, 2020, relative to the total employer
contributions received from all of PERA's participating employers. At June 30, 2020, the City's proportionate share was
0.0247 percent at the end of the measurement period and 0.0218 percent for the beginning of the period.
City's proportionate share of the net pension liability 1,480,878$
State of Minnesota's proportionate of the net pension liability
associated with the City 45,554
Total 1,526,432$
For the year ended December 31, 2020, the City recognized pension expense of $147,754 for its proportionate share of the
General Employees Plan's pension expense. Included in the amount, the City recognized $3,965 as pension expense
(and grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General
Employees Fund.
69
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
At December 31, 2020, the City reported its proportionate share of the General Employees Plan's deferred outflows of
resources and deferred inflows of resources, related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences Between Expected and Actual Economic Experience 11,910$ 5,604$
Changes in Actuarial Assumptions - 51,062
Net Collective Difference Between
Projected and Actual Investment Earnings 40,888 -
Changes in Proportion 128,574 -
Contributions Paid Subsequent to the Measurement Date 66,579 -
Totals 247,951$ 56,666$
Deferred outflows totaling $66,579 related to pensions resulting from the City's contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020.
Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in
pension expense as follows:
Year Pension
Ended Expense
December 31, Amount
2021 (25,469)$
2022 46,417
2023 67,979
2024 35,779
2025 -
Thereafter -
Total 124,706$
Description
70
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2020, actuarial valuation was determined using an individual entry age normal
actuarial cost method and the following actuarial assumptions:
Inflation 2.25% per year
Active Member Payroll Growth 3.00% 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 disablitants
for the plan were based on RP-2014 tables for males or females, as appropriate, with slight adjustments to fit PERA's
experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25 percent per year.
Actuarial assumptions used in the June 30, 2020, valuation were based on the results of actuarial experience studies. The most
recent four-year experience study in the Plan was completed in 2019. The assumption changes were adopted by the Board
and became effective with the July 1, 2020, actuarial valuation.
The following changes in actuarial assumptions occurred in 2020:
• The prince inflation assumption was decreased from 2.5 percent to 2.25 percent.
• The payroll growth assumption was decreased from 3.25 percent to 3.0 percent.
• Assumed salary increase rates were changed as recommended in the June 30, 2019, experience study. The net
effect is assumed rates that average 0.25 percent less than previous rates.
• Assumed rates of retirement were changed as recommended in the June 30, 2019, experience study. The changes
result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements.
• Assumed rates of termination were changes as recommended in the June 30, 2019, experience study. The new rates
are based on service and are generally lower than previous rates for years 2-5 and slightly higher thereafter.
• Assumed rates of disability were changed as recommended in the June 30, 2019, experience study. The change results
in fewer predicted disability retirements for males and females.
• The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010
General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the
RP-2014 disabled annuitant mortality table to the Pub-2010 General/Teacher disabled annuitant mortality table, with
adjustments.
• The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
• The assumed spouse age difference was changed from two years older for females to one year older.
• The assumed number of married male new retirees electing the 100% Joint and Survivor option changed from 35
percent to 45 percent. The assumed number of married female new retirees electing the 100% Joint and Survivor
option changed from 15 percent to 30 percent. The corresponding number of married new retirees electing the Life
annuity option was adjusted accordingly.
71
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
The following changes in plan provisions occurred in 2020:
• Augmentation for current privatized members was reduced to 2.0 percent for the period July 1, 2020 through
December 31, 2023, and 0.0 percent thereafter. Augmentation was eliminated for privatizations occurring after
June 30, 2020.
The State Board of Investment, which manages the investments of 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:
Long-Term
Target Expected Real
Allocation Rate of Return
Domestic Stocks 35.50%5.10%
International Stocks 17.50%5.30%
Bonds (Fixed Income)20.00%0.75%
Alternative Assets (Private Markets)25.00%5.90%
Cash 2.00%0.00%
Total 100.00%
Asset Class
72
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
F. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2020 was 7.5 percent. The projection of cash flows used to
determine the discount rate assumed that contributions from Plan members and employers will be made at rates set in
Minnesota Statutes. Based on these assumptions, the fiduciary net positions of the General Employees Fund 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.
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 paragraph, as well as what the City's proportionate share of the net pension liability
would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current rate.
6.50% 7.50% 8.50%
One Point Current One Point
Decrease Rate Increase
General Employees Fund 2,373,334$ 1,480,878$ 744,674$
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 at www.mnpera.org.
City's Proportionate Share
of the Net Pension Liability
73
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 6 NEW ACCOUNTING PRONOUNCEMENTS
The Governmental Accounting Standards Board recently approved the following statements which were not implemented in
these financial statements. The effect these standards may have on future financial statements has not been determined.
• Statement No. 87, Leases
This new standard establishes a single model for lease accounting based on the foundational principle that leases are
financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability
and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and deferred inflow
of resources, thereby enhancing the relevance and consistency about governments' leasing activities. This statement
will be effective for the year ending December, 31, 2022.
• Statement No. 89, Accounting for Interest Cost Incurred Before the End of Construction Period
This new standard enhances the relevance and comparability of information about capital assets and the cost of
borrowing for a reporting period and simplifies accounting for interest cost incurred before the end of a construction
period. This statement will be effective for the year ending December 31, 2021.
74
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75
CITY OF OTSEGO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION (LAST TEN YEARS*)
SCHEDULE OF CITY'S PROPORTIONATE SHARE OF NET PENSION LIABILITY
GENERAL EMPLOYEE'S RETIREMENT FUND
City's
Proportionate ($)
Share of the Net
Pension Liability City's
State's and the State's Proportionate (%)
City's City's Proportionate (S) Proportionate ($)Share of Net Plan Fiduciary
Proportionate (%) Proportionate ($) Share of the Net Share of the Net Pension Liability Net Position
Fiscal Share of Share of Pension Liability Pension Liability City's Compared With as a Percentage
Year Net Pension Net Pension Associated With Associated With Covered Covered of the Total
Ending Liability Liability the City the City Payroll Payroll Pension Liability
June 30, 2020 0.0247% 1,480,878$ 45,554$ 1,526,432$ 1,745,138$ 84.86%79.10%
June 30, 2019 0.0218% 1,205,273 37,332 1,242,605 1,531,014 78.72%80.20%
June 30, 2018 0.0215% 1,192,732 39,115 1,231,847 1,365,460 87.35%79.50%
June 30, 2017 0.0215% 1,372,546 17,254 1,389,800 1,332,687 102.99%75.89%
June 30, 2016 0.0198% 1,607,662 20,935 1,628,597 1,136,013 141.52%68.91%
June 30, 2015 0.0195% 1,010,592 - 1,010,592 1,124,606 89.86%78.19%
This supplementary information is provided prospectively beginning with the Year Ended December 31, 2015.
76
CITY OF OTSEGO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION (LAST TEN YEARS*)
SCHEDULE OF CITY'S CONTRIBUTIONS
GENERAL EMPLOYEE'S RETIREMENT FUND
Contributions
in Relation to Contributions
Statutorily Statutorily Contribution City's as a Percentage
Year Required Required (Excess) Covered of Covered
Ending Contributions Contributions Deficiency Payroll Payroll
December 31, 2020 133,158$ 133,158$ -$ 1,775,440$ 7.50%
December 31, 2019 120,583 120,583 - 1,607,772 7.50%
December 31, 2018 110,473 110,473 - 1,472,972 7.50%
December 31, 2017 98,542 98,542 - 1,313,896 7.50%
December 31, 2016 96,567 96,567 - 1,287,564 7.50%
December 31, 2015 83,256 83,256 - 1,110,085 7.50%
This supplementary information is provided prospectively beginning with the Year Ended December 31, 2015.
77
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2020
NOTE 1 GENERAL EMPLOYEES FUND
CHANGES FOR 2020
Changes in Actuarial Assumptions
• The prince inflation assumption was decreased from 2.5 percent to 2.25 percent.
• The payroll growth assumption was decreased from 3.25 percent to 3.0 percent.
• Assumed salary increase rates were changed as recommended in the June 30, 2019, experience study. The net
effect is assumed rates that average 0.25 percent less than previous rates.
• Assumed rates of retirement were changed as recommended in the June 30, 2019, experience study. The changes
result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements.
• Assumed rates of termination were changes as recommended in the June 30, 2019, experience study. The new rates
are based on service and are generally lower than previous rates for years 2-5 and slightly higher thereafter.
• Assumed rates of disability were changed as recommended in the June 30, 2019, experience study. The change results
in fewer predicted disability retirements for males and females.
• The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010
General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the
RP-2014 disabled annuitant mortality table to the Pub-2010 General/Teacher disabled annuitant mortality table, with
adjustments.
• The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
• The assumed spouse age difference was changed from two years older for females to one year older.
• The assumed number of married male new retirees electing the 100% Joint and Survivor option changed from 35
percent to 45 percent. The assumed number of married female new retirees electing the 100% Joint and Survivor
option changed from 15 percent to 30 percent. The corresponding number of married new retirees electing the Life
annuity option was adjusted accordingly.
Changes in Plan Provisions
• Augmentation for current privatized members was reduced to 2.0 percent for the period July 1, 2020 through
December 31, 2023, and 0.0 percent thereafter. Augmentation was eliminated for privatizations occurring after
June 30, 2020.
78
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2020
CHANGES FOR 2019
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
• The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per
year. The State's special funding contribution was changed prospectively, requiring $16.0 million per year through 2031.
CHANGES FOR 2018
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2015 to MP-2017.
• The assumed post-retirement benefit increase rate was changed from 1.00 percent per year through 2044 and 2.50
percent per year thereafter to 1.25 percent per year.
Changes in Plan Provisions
• The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019,
resulting in actuarial equivalence after June 30, 2024.
• Interest credited on member contributions decreased from 4.0 percent to 3.0 percent, beginning July 1, 2018.
• Deferred augmentation was changed to 0.0 percent, effective January 1, 2019. Augmentation that has already accrued
for deferred members will still apply.
• Contribution stabilizer provisions were repealed.
• Postretirement benefit increases were changed from 1.0 percent per year with a provision to increase to 2.5 percent
upon attainment of 90.0 percent funding ratio to 50.0 percent of the Social Security Cost of Living Adjustment, not less
than 1.0 percent and not more than 1.5 percent, beginning January 1, 2019.
• For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal
retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors.
• Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
79
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2020
CHANGES FOR 2017
Changes in Actuarial Assumptions
• The Combined Service Annuity (CSA) loads were changed from 0.80 percent for active members and 60 percent for
both vested and non-vested deferred members. The revised CSA loads are now 0.00 percent for active member liability,
15 percent for vested deferred member liability, and 3.00 percent for non-vested deferred member liability.
• The assumed post-retirement benefit increase rate was changed from 1.00 percent per year for all years to 1.00 percent
per year through 2044, and 2.50% percent thereafter.
Changes in Plan Provisions
• The State's contribution for the Minneapolis Employees Retirement Fund equals $16.0 million in 2017 and 2018, and
$6.0 million thereafter.
• The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from $21.0 million
to $31.0 million in calendar years 2019 to 2031. The State's contribution changed from $16.0 million to $6.0 million
in calendar years 2019 to 2031.
CHANGES FOR 2016
Changes in Actuarial Assumptions
• The assumed post-retirement benefit increase was changed from 1.00% per year through 2035 and 2.50% per year
thereafter to 1.00% per year for all future years.
• The assumed investment return was changed from 7.90% to 7.50%. The single discount rate was changed
from 7.90% to 7.50%.
• Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary
increases and payroll growth were decreased by 0.25% to 3.25%. Inflation was decreased 0.25% to 2.50%.
Changes in Plan Provisions
• There have been no changes since the prior valuation.
CHANGES FOR 2015
Changes in Actuarial Assumptions
• The assumed post-retirement benefit increase rate was changed from 1.00% per year through 2030 and 2.50% per
year thereafter to 1.00% per year through 2035 and 2.50% per year thereafter.
Changes in Plan Provisions
• On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which
increased the total pension liability by $1.10 billion, and increased the fiduciary plan net position by $892 million. Upon
consolidation, state and employer contributions were revised; the State's contribution of $6.0 million, which meets the
special funding situation definition, was due September 2015.
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81
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2020
Total
Special Capital Nonmajor
Revenue Project Governmental
ASSETS
Cash and Investments 629,407$ 14,203,769$ 14,833,176$
Receivables
Accounts 1,927 - 1,927
Special Assessments
Current - 324 324
Deferred - 313,542 313,542
Delinquent - 2,386 2,386
Total Assets 631,334 14,520,021 15,151,355
LIABILITIES
Accounts Payable 398 110,974 111,372
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments - 315,928 315,928
FUND BALANCES
Restricted
Tax Increment Financing 146,354 - 146,354
Park Development - 4,206,129 4,206,129
Committed
Street Light Replacement 99,193 - 99,193
Business Development Loans 385,389 - 385,389
Assigned
City Buildings & Infrastructure - 9,282,191 9,282,191
City Parks - 604,799 604,799
Total Fund Balances 630,936 14,093,119 14,724,055
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 631,334$ 14,520,021$ 15,151,355$
82
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Total
Special Capital Nonmajor
Revenue Project Governmental
REVENUES
Property Taxes 56,491$ 1,523,000$ 1,579,491$
Tax Increments 275,445 - 275,445
Intergovernmental - 390,594 390,594
Charges for Services 55,650 1,151,432 1,207,082
Special Assessments - 36,668 36,668
Investment Earnings (net) 15,250 387,320 402,570
Miscellaneous - 55,460 55,460
Total Revenues 402,836 3,544,474 3,947,310
EXPENDITURES
Current
Public Works 26,500 - 26,500
Economic Development 223,375 - 223,375
Capital Outlay
General Government - 82,080 82,080
Public Safety - 32,869 32,869
Public Works - 1,341,038 1,341,038
Culture and Recreation - 324,404 324,404
Total Expenditures 249,875 1,780,391 2,030,266
Excess of Revenues
Over Expenditures 152,961 1,764,083 1,917,044
OTHER FINANCING SOURCES (USES)
Transfers In - 1,631,309 1,631,309
Transfers Out - (1,258,250) (1,258,250)
Total Other Financing Sources (Uses) - 373,059 373,059
Net Change in Fund Balance 152,961 2,137,142 2,290,103
Fund Balance - January 1 477,975 11,955,977 12,433,952
Fund Balance - December 31 630,936$ 14,093,119$ 14,724,055$
83
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84
CITY OF OTSEGO, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
A special revenue fund is used to account for and report the proceeds of specific revenue sources that are restricted or
committed to expenditure for specified purposes other than debt service or capital projects.
Street Lighting
This fund accounts for the electrical service, maintenance, repair and replacement of street lights within the City's
above standard street-lighting district for commercially developed areas. The primary funding source of the fund
is generated through charges for services imposed upon the benefitting properties in the district.
Revolving Loans
This fund was established to provide for economic development subsidies and loans to be provided to business
entities in the City through the City's Economic Development Authority (EDA).
Tax Increment District No. 1 - Great River Centre
This fund was established to account for the collection of tax increment generated revenues for parcels within the
District. The District encompasses two parcels in the Great River Centre commercial and industrial area. The
increment generated is used for specific economic development incentives within the District.
Tax Increment District No. 3 - Riverview Landing
This fund was established to account for the collection of tax increment generated revenues for parcels within the
District. The District is a housing district and is located in the Waterfront East development area. The increment
generated is used to provide 20% of the residential units to persons or families of low and moderate income.
Tax Increment District No. 4 - Riverbend North
This fund was established to account for the collection of tax increment generated revenues for parcels within the
District. The District is a redevelopment district and includes four parcels within the Riverbend North plat, located
near CSAH 42 and Highway 101. The increment generated is used to redevelop the existing site, including the
decommissioning of a private wasterwater facility, construciton of multifamily housing, a mini-storage facility and
and site preparations to accomodature approximately 15,000 square feet of future commercial development.
85
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
DECEMBER 31, 2020
Total
Nonmajor
Street Revolving Tax Increment Tax Increment Tax Increment Special
Lighting Loans District No. 1 District No. 3 District No. 4 Revenue
ASSETS
Cash and Investments 97,266$ 385,389$ 50,880$ 89,209$ 6,663$ 629,407$
Receivables
Accounts 1,927 - - - - 1,927
Total Assets 99,193 385,389 50,880 89,209 6,663 631,334
LIABILITIES
Accounts Payable - - - - 398 398
FUND BALANCES
Restricted
Tax Increment Financing - - 50,880 89,209 6,265 146,354
Committed
Street Light Replacement 99,193 - - - - 99,193
Business Development Loans - 385,389 - - - 385,389
Total Fund Balances 99,193 385,389 50,880 89,209 6,265 630,936
Total Liabilities and Fund Balances 99,193$ 385,389$ 50,880$ 89,209$ 6,663$ 631,334$
86
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Total
Nonmajor
Street Revolving Tax Increment Tax Increment Tax Increment Special
Lighting Loans District No. 1 District No. 3 District No. 4 Revenue
REVENUES
Property Taxes -$ 56,491$ -$ -$ -$ 56,491$
Tax Increments - - 98,016 168,042 9,387 275,445
Charges for Services 55,650 - - - - 55,650
Investment Earnings (net) 2,824 12,426 - - - 15,250
Total Revenues 58,474 68,917 98,016 168,042 9,387 402,836
EXPENDITURES
Current
Public Works 26,500 - - - - 26,500
Economic Development - 54,985 89,302 77,199 1,889 223,375
Total Expenditures 26,500 54,985 89,302 77,199 1,889 249,875
Net Change in Fund Balance 31,974 13,932 8,714 90,843 7,498 152,961
Fund Balance (Deficit) - January 1 67,219 371,457 42,166 (1,634) (1,233) 477,975
Fund Balance - December 31 99,193$ 385,389$ 50,880$ 89,209$ 6,265$ 630,936$
87
CITY OF OTSEGO, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
REVOLVING LOANS FUND - SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Property Taxes 56,491$ 56,491$ 56,491$ -$
Investment Earnings (net) - - 12,426 12,426
Total Revenues 56,491 56,491 68,917 12,426
EXPENDITURES
Current
Economic Development
Services and Other Charges 56,491 56,491 54,985 (1,506)
Net Change in Fund Balance - - 13,932 13,932
Fund Balance - January 1 371,457 371,457 371,457 -
Fund Balance - December 31 371,457$ 371,457$ 385,389$ 13,932$
88
CITY OF OTSEGO, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
TAX INCREMENT DISTRICT NO. 1 - SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Tax Increments 97,419$ 97,419$ 98,016$ 597$
EXPENDITURES
Current
Economic Development
Personal Services 500 500 505 5
Services and Other Charges 90,177 90,177 88,797 (1,380)
Total Expenditures 90,677 90,677 89,302 (1,375)
Net Change in Fund Balance 6,742 6,742 8,714 1,972
Fund Balance - January 1 42,166 42,166 42,166 -
Fund Balance - December 31 48,908$ 48,908$ 50,880$ 1,972$
89
CITY OF OTSEGO, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
TAX INCREMENT DISTRICT NO. 3 - SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Tax Increments 163,601$ 163,601$ 168,042$ 4,441$
EXPENDITURES
Current
Economic Development
Personal Services 500 500 729 229
Services and Other Charges 76,120 76,120 76,470 350
Total Expenditures 76,620 76,620 77,199 579
Net Change in Fund Balance 86,981 86,981 90,843 3,862
Fund Balance (Deficit) - January 1 (1,634) (1,634) (1,634) -
Fund Balance - December 31 85,347$ 85,347$ 89,209$ 3,862$
90
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91
CITY OF OTSEGO, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS
Capital projects funds are used to account for and report financial resources that are restricted, committed, or
assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other
capital assets.
Pavement Management
This fund was established to provide funds and to account for the expenditure of such funds, for costs associated
with the City's street maintenance and replacement plan adopted annually within the Capital Improvement Plan.
Annual projects may include: fog & seal coating, crack filling, paint striping, patching and asphalt overlays.
Trails Management
This fund was established to provide funds and to account for the expenditure of such funds, for costs associated
with the City's trail maintenance plan adopted annually within the Capital Improvement Plan. Annual projects will
typically include: crack filling, patching and seal coating.
Park Development
This fund was established to accumulate funds that will be used to provide for the acquisition and construction of
new park sites, buildings and facilities throughout our growing City.
Parks Capital Equipment
This fund was established to accumulate funds for major maintenance and future replacement of equipment within
the City's park system.
Revolving Capital Equipment
This fund was established to provide funds and to account for the expenditure of such funds, for costs associated
with the replacement of capital equipment, most significantly the City's machinery and vehicle fleet.
Community Facilities
This fund was established to accumulate funds that will be used to provide for the costs associated with the
improvements of existing City facilities and the acquisition and construction of additional City facilities.
Collector Streets
This fund was established to accumulate funds derived from ongoing residential and commercial development that
will provide for the costs associated with the construction of future arterial collector street infrastructure.
92
CITY OF OTSEGO, MINNESOTA
NONMAJOR CAPITAL PROJECTS FUNDS (CONTINUED)
Fire Reserve
This fund was established to accumulate funds that will be used to finance the costs associated with the future
construction of a fire department building and the capital equipment that will be housed within.
Watershed Districts
This fund was established to provide funds and to account for the expenditure of such funds, for costs associated
with the maintenance of major water drainage system ditches throughout the City.
Odean Improvements
This fund was established to track the expenditures incurred for major improvements made to Odean Avenue in
1998. The outstanding special assessments to the benefitting property owners provide the funding for the costs.
Slabtown Improvements
This fund was established to track the expenditures incurred for infrastructure improvements to the Slabtown
area. The outstanding special assessments to the benefitting property owners provide the funding for the costs.
Kadler Avenue Improvements
This fund was established to track the expenditures incurred for infrastructure improvements being planned for
Kadler Avenue. The improvements will provide for an urban style street capable of handling the volumes and type
of traffic associated with an industrial park, of which has received preliminary development approvals.
City Buildings & Property Maintenance
This fund was established to provide funds and to account for the expenditure of such funds, for costs associated
with the maintenance of and improvements to City buildings and properties.
93
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
DECEMBER 31, 2020
Parks
Pavement Trails Park Capital
Management Management Development Equipment
ASSETS
Cash and Investments 5,304,220$ 227,306$ 4,292,996$ 604,799$
Receivables
Special Assessments
Current - - - -
Deferred 277,349 - 16,870 -
Delinquent 2,062 - - -
Total Assets 5,583,631 227,306 4,309,866 604,799
LIABILITIES
Accounts Payable 1,107 23,000 86,867 -
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments 279,411 - 16,870 -
FUND BALANCES
Restricted
Park Development - - 4,206,129 -
Assigned
City Buildings & Infrastructure 5,303,113 204,306 - -
City Parks - - - 604,799
Total Fund Balances 5,303,113 204,306 4,206,129 604,799
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 5,583,631$ 227,306$ 4,309,866$ 604,799$
94
(CONTINUED)
Revolving
Capital Community Collector Fire Watershed Odean
Equipment Facilities Streets Reserve Districts Improvements
390,669$ -$ -$ 1,791,201$ 1,508,443$ -$
- - - 324 - -
- - - - 19,323 -
- - - 324 - -
390,669 - - 1,791,849 1,527,766 -
- - - - - -
- - - 324 19,323 -
- - - - - -
390,669 - - 1,791,525 1,508,443 -
- - - - - -
390,669 - - 1,791,525 1,508,443 -
390,669$ -$ -$ 1,791,849$ 1,527,766$ -$
95
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET (CONTINUED)
NONMAJOR CAPITAL PROJECT FUNDS
DECEMBER 31, 2020
Total
City Buildings Nonmajor
Slabtown Kadler Avenue & Property Capital
Improvements Improvements Maintenance Projects
ASSETS
Cash and Investments -$ -$ 84,135$ 14,203,769$
Receivables
Special Assessments
Current - - - 324
Deferred - - - 313,542
Delinquent - - - 2,386
Total Assets - - 84,135 14,520,021
LIABILITIES
Accounts Payable - - - 110,974
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments - - - 315,928
FUND BALANCES
Restricted
Park Development - - - 4,206,129
Assigned
City Buildings & Infrastructure - - 84,135 9,282,191
City Parks - - - 604,799
Total Fund Balances - - 84,135 14,093,119
Total Liabilities, Deferred Inflows of
Resources and Fund Balances -$ -$ 84,135$ 14,520,021$
96
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97
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Parks
Pavement Trails Park Capital
Management Management Development Equipment
REVENUES
Property Taxes 950,000$ 33,000$ -$ 60,000$
Intergovernmental 314,292 - - -
Charges for Services - - 780,930 -
Special Assessments 31,488 - - -
Investment Earnings (net) 124,282 1,420 132,716 16,414
Miscellaneous - - - 30,947
Total Revenues 1,420,062 34,420 913,646 107,361
EXPENDITURES
Capital Outlay
General Government - - - -
Public Safety - - - -
Public Works 426,574 - - -
Culture and Recreation - 32,250 265,032 -
Total Expenditures 426,574 32,250 265,032 -
Excess (Deficiency) of Revenues
Over (Under) Expenditures 993,488 2,170 648,614 107,361
OTHER FINANCING SOURCES (USES)
Transfers In 1,111,482 200,000 - 80,000
Transfers Out - - (79,253) -
Total Other Financing Sources (Uses) 1,111,482 200,000 (79,253) 80,000
Net Change in Fund Balance 2,104,970 202,170 569,361 187,361
Fund Balance (Deficit) - January 1 3,198,143 2,136 3,636,768 417,438
Fund Balance - December 31 5,303,113$ 204,306$ 4,206,129$ 604,799$
98
(CONTINUED)
Revolving
Capital Community Collector Fire Watershed Odean
Equipment Facilities Streets Reserve Districts Improvements
280,000$ -$ -$ 180,000$ -$ -$
- - - - - -
- - - - 370,502 -
- - 4,782 398 - -
10,150 - - 54,071 47,518 -
- - - - - -
290,150 - 4,782 234,469 418,020 -
- - - - - -
24,907 - - 7,962 - -
152,436 - 755,623 - - -
17,422 - - - - -
194,765 - 755,623 7,962 - -
95,385 - (750,841) 226,507 418,020 -
- 79,253 - - - -
- (80,000) (1,071,128) - - (5,075)
- (747) (1,071,128) - - (5,075)
95,385 (747) (1,821,969) 226,507 418,020 (5,075)
295,284 747 1,821,969 1,565,018 1,090,423 5,075
390,669$ -$ -$ 1,791,525$ 1,508,443$ -$
99
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND (CONTINUED)
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2020
Total
City Buildings Nonmajor
Slabtown Kadler Avenue & Property Capital
Improvements Improvements Maintenance Projects
REVENUES
Property Taxes -$ -$ 20,000$ 1,523,000$
Intergovernmental - 76,302 - 390,594
Charges for Services - - - 1,151,432
Special Assessments - - - 36,668
Investment Earnings (net) - - 749 387,320
Miscellaneous - 24,513 - 55,460
Total Revenues - 100,815 20,749 3,544,474
EXPENDITURES
Capital Outlay
General Government - - 82,080 82,080
Public Safety - - - 32,869
Public Works - 6,405 - 1,341,038
Culture and Recreation - - 9,700 324,404
Total Expenditures - 6,405 91,780 1,780,391
Excess (Deficiency) of Revenues
Over (Under) Expenditures - 94,410 (71,031) 1,764,083
OTHER FINANCING SOURCES (USES)
Transfers In - 60,574 100,000 1,631,309
Transfers Out (22,794) - - (1,258,250)
Total Other Financing Sources (Uses) (22,794) 60,574 100,000 373,059
Net Change in Fund Balance (22,794) 154,984 28,969 2,137,142
Fund Balance (Deficit) - January 1 22,794 (154,984) 55,166 11,955,977
Fund Balance - December 31 -$ -$ 84,135$ 14,093,119$
100
CITY OF OTSEGO, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND Page 1 of 5
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
(With Comparative Actual Amounts for the Year Ended December 31, 2019)
2019
Variance with
Final Budget -
Budgeted Amounts Actual Over Actual
Original Final Amounts (Under) Amounts
REVENUES
Property Taxes
Current 4,472,537$ 4,472,537$ 4,461,923$ (10,614)$ 4,173,764$
Delinquent 20,000 20,000 34,083 14,083 16,292
Penalties and interest 2,000 2,000 1,717 (283) 2,142
Total Property Taxes 4,494,537 4,494,537 4,497,723 3,186 4,192,198
Franchise Taxes 141,000 141,000 132,137 (8,863) 137,510
Licenses and Permits
Business Licenses 35,150 35,150 31,023 (4,127) 34,765
Rental Licenses 47,000 47,000 33,202 (13,798) 39,515
Other Licenses 2,000 2,000 1,730 (270) 6,323
Right of Way Permits 40,000 40,000 79,505 39,505 64,900
Building Permits 952,770 952,770 2,371,929 1,419,159 1,543,726
Other Permits 9,300 9,300 15,400 6,100 10,650
Total Licenses and Permits 1,086,220 1,086,220 2,532,789 1,446,569 1,699,879
Intergovernmental
Federal
Other Aid & Grants - - 1,302,963 1,302,963 -
State
Police Aid 65,000 65,000 78,124 13,124 75,425
Other Aid & Grants 10,000 10,000 15,127 5,127 12,503
Local
Other Aid & Grants - - - - 400
Total Intergovernmental 75,000 75,000 1,396,214 1,321,214 88,328
Charges for Services
General Government 49,300 49,300 115,675 66,375 116,323
Public Works 78,250 78,250 118,671 40,421 122,995
Culture and Recreation 75,065 75,065 22,852 (52,213) 71,553
Total Charges for Services 202,615 202,615 257,198 54,583 310,871
Special Assessments 4,600 4,600 5,434 834 5,703
Fines and Forfeitures 24,000 24,000 19,959 (4,041) 26,488
Investment Earnings (net)83,000 83,000 177,948 94,948 155,709
Miscellaneous
Refunds and Reimbursements - - 30,388 30,388 26,947
Contributions and Donations - - 1,000 1,000 26,829
Other - - 4,907 4,907 22,397
Total Miscellaneous - - 36,295 36,295 76,173
Total Revenues 6,110,972 6,110,972 9,055,697 2,944,725 6,692,859
2020
101
CITY OF OTSEGO, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND Page 2 of 5
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
(With Comparative Actual Amounts for the Year Ended December 31, 2019)
2019
Variance with
Final Budget -
Budgeted Amounts Actual Over Actual
Original Final Amounts (Under) Amounts
EXPENDITURES
General Government
City Council
Personal Services 36,671 36,671 31,368 (5,303) 31,749
Supplies 375 375 371 (4) 80
Services and Other Charges 111,389 111,389 54,373 (57,016) 45,172
Total 148,435 148,435 86,112 (62,323) 77,001
City Administrator
Personal Services 169,159 169,159 169,680 521 158,652
Supplies 50 50 63 13 47
Services and Other Charges 6,045 6,045 1,463 (4,582) 2,897
Total 175,254 175,254 171,206 (4,048) 161,596
Administration
Personal Services 230,725 230,725 214,358 (16,367) 241,285
Supplies 8,650 8,650 8,211 (439) 10,039
Services and Other Charges 57,890 57,890 52,151 (5,739) 59,062
Total 297,265 297,265 274,720 (22,545) 310,386
Elections
Personal Services 21,100 21,100 22,597 1,497 -
Supplies 9,500 9,500 7,237 (2,263) 921
Services and Other Charges 4,050 4,050 3,363 (687) 1,626
Total 34,650 34,650 33,197 (1,453) 2,547
Assessing
Services and Other Charges 124,551 124,551 125,118 567 112,976
Finance
Personal Services 164,479 164,479 169,227 4,748 145,308
Supplies 2,600 2,600 664 (1,936) 1,791
Services and Other Charges 61,224 61,224 78,849 17,625 66,631
Total 228,303 228,303 248,740 20,437 213,730
Information Technology
Supplies 4,000 4,000 4,534 534 1,586
Services and Other Charges 84,100 84,100 88,138 4,038 69,373
Total 88,100 88,100 92,672 4,572 70,959
Legal
Services and Other Charges 94,600 94,600 83,558 (11,042) 95,478
Human Resources
Personal Services 85,614 85,614 71,573 (14,041) 173
Supplies 50 50 - (50) -
Services and Other Charges 11,134 11,134 17,594 6,460 119
Total 96,798 96,798 89,167 (7,631) 292
2020
102
CITY OF OTSEGO, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND Page 3 of 5
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
(With Comparative Actual Amounts for the Year Ended December 31, 2019)
2019
Variance with
Final Budget -
Budgeted Amounts Actual Over Actual
Original Final Amounts (Under) Amounts
EXPENDITURES (CONTINUED)
General Government (Continued)
Prairie Center
Supplies 9,000 9,000 11,097 2,097 7,613
Services and Other Charges 32,508 32,508 26,947 (5,561) 33,058
Total 41,508 41,508 38,044 (3,464) 40,671
City Hall & Public Works Garage
Supplies 12,400 12,400 17,531 5,131 9,840
Services and Other Charges 106,585 106,585 95,868 (10,717) 109,666
Total 118,985 118,985 113,399 (5,586) 119,506
Old Town Hall
Services and Other Charges 3,300 3,300 2,990 (310) 2,916
Total General Government 1,451,749 1,451,749 1,358,923 (92,826) 1,208,058
Public Safety
Police Services
Services and Other Charges 1,398,696 1,398,696 1,391,755 (6,941) 1,326,668
Public Safety Commission
Personal Services 960 960 390 (570) 670
Supplies 600 600 - (600) -
Services and Other Charges 1,500 1,500 - (1,500) -
Total 3,060 3,060 390 (2,670) 670
Fire Protection
Supplies 500 500 450 (50) -
Services and Other Charges 722,949 722,949 722,566 (383) 633,384
Total 723,449 723,449 723,016 (433) 633,384
Building Inspections
Personal Services 144,419 144,419 146,365 1,946 131,188
Supplies 4,600 4,600 3,138 (1,462) 2,916
Services and Other Charges 317,294 317,294 385,589 68,295 265,828
Total 466,313 466,313 535,092 68,779 399,932
Emergency Management
Supplies 500 500 1,785 1,285 1,944
Services and Other Charges 2,100 2,100 607 (1,493) 605
Total 2,600 2,600 2,392 (208) 2,549
Animal Control
Services and Other Charges 15,400 15,400 14,790 (610) 16,237
Total Public Safety 2,609,518 2,609,518 2,667,435 57,917 2,379,440
2020
103
CITY OF OTSEGO, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND Page 4 of 5
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
(With Comparative Actual Amounts for the Year Ended December 31, 2019)
2019
Variance with
Final Budget -
Budgeted Amounts Actual Over Actual
Original Final Amounts (Under) Amounts
EXPENDITURES (CONTINUED)
Public Works
Streets Maintenance
Personal Services 606,540 606,540 575,609 (30,931) 545,903
Supplies 166,661 166,661 146,871 (19,790) 160,829
Services and Other Charges 92,331 92,331 55,860 (36,471) 64,664
Total 865,532 865,532 778,340 (87,192) 771,396
Engineering
Services and Other Charges 87,150 87,150 52,253 (34,897) 90,784
Street Lighting
Services and Other Charges 156,880 156,880 153,058 (3,822) 144,594
Fleet Management
Personal Services 82,431 82,431 82,946 515 79,182
Supplies 144,153 144,153 111,149 (33,004) 135,067
Services and Other Charges 10,960 10,960 26,918 15,958 19,204
Total 237,544 237,544 221,013 (16,531) 233,453
Total Public Works 1,347,106 1,347,106 1,204,664 (142,442) 1,240,227
Culture and Recreation
Parks Maintenance
Personal Services 296,465 296,465 276,154 (20,311) 281,008
Supplies 77,410 77,410 88,035 10,625 77,589
Services and Other Charges 129,972 129,972 136,971 6,999 122,648
Total 503,847 503,847 501,160 (2,687) 481,245
Recreation
Personal Services 177,086 177,086 152,951 (24,135) 160,132
Supplies 15,150 15,150 5,279 (9,871) 7,818
Services and Other Charges 61,526 61,526 36,057 (25,469) 60,931
Total 253,762 253,762 194,287 (59,475) 228,881
Heritage Preservation Commission
Personal Services 480 480 300 (180) 280
Supplies 500 500 - (500) -
Services and Other Charges 1,500 1,500 - (1,500) -
Total 2,480 2,480 300 (2,180) 280
Total Culture and Recreation 760,089 760,089 695,747 (64,342) 710,406
2020
104
CITY OF OTSEGO, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND Page 5 of 5
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
(With Comparative Actual Amounts for the Year Ended December 31, 2019)
2019
Variance with
Final Budget -
Budgeted Amounts Actual Over Actual
Original Final Amounts (Under) Amounts
EXPENDITURES (CONTINUED)
Economic Development
Planning Commission
Personal Services 2,500 2,500 1,550 (950) 1,500
Services and Other Charges 1,500 1,500 - (1,500) -
Total 4,000 4,000 1,550 (2,450) 1,500
Planning
Services and Other Charges 106,000 106,000 102,460 (3,540) 107,637
Economic Development
Supplies 100 100 - (100) 66
Services and Other Charges 15,360 15,360 561,788 546,428 4,938
Total 15,460 15,460 561,788 546,328 5,004
Total Economic Development 125,460 125,460 665,798 540,338 114,141
Capital Outlay
General Government 10,600 10,600 60,712 50,112 19,507
Public Works 3,450 3,450 - (3,450) 10,491
Culture and Recreation 4,700 4,700 4,046 (654) 4,620
Total 18,750 18,750 64,758 46,008 34,618
Total Expenditures 6,312,672 6,312,672 6,657,325 344,653 5,686,890
Excess (Deficiency) of Revenues
Over (Under) Expenditures (201,700) (201,700) 2,398,372 2,600,072 1,005,969
OTHER FINANCING SOURCES (USES)
Transfers In 201,700 201,700 201,795 95 171,900
Transfers Out - - (932,244) (932,244) (971,726)
Total Other Financing Sources (Uses) 201,700 201,700 (730,449) (932,149) (799,826)
Net Change in Fund Balance - - 1,667,923 1,667,923 206,143
Fund Balance - January 1 4,319,810 4,319,810 4,319,810 - 4,113,667
Fund Balance - December 31 4,319,810$ 4,319,810$ 5,987,733$ 1,667,923$ 4,319,810$
2020
105
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
DEBT SERVICE FUND BY ACCOUNT
DECEMBER 31, 2020
Series Series
2012A 2018A
ASSETS
Cash and Investments 169,174$ 428,683$
Receivables
Special Assessments
Current - 1,217
Deferred 54,091 1,008,419
Delinquent - 966
Total Assets 223,265 1,439,285
LIABILITIES
Accounts Payable 161 161
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments 54,091 1,009,385
FUND BALANCES
Restricted 169,013 429,739
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 223,265$ 1,439,285$
106
Total
Series Series Series Debt
2020A 2010B 2007B Service
485,614$ 36,187$ -$ 1,119,658$
- - - 1,217
937,012 - - 1,999,522
- - - 966
1,422,626 36,187 - 3,121,363
321 161 - 804
937,012 - - 2,000,488
485,293 36,026 - 1,120,071
1,422,626$ 36,187$ -$ 3,121,363$
107
CITY OF OTSEGO, MINNESOTA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
DEBT SERVICE FUND BY ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2020
Series Series
2012A 2018A
REVENUES
Property Taxes -$ 91,758$
Special Assessments 34,912 193,999
Total Revenues 34,912 285,757
EXPENDITURES
Debt Service
Principal 205,000 170,000
Interest 8,000 66,856
Fiscal Agent Fees 656 656
Total Expenditures 213,656 237,512
Excess (Deficiency) of Revenues
Over (Under) Expenditures (178,744) 48,245
OTHER FINANCING SOURCES (USES)
Issuance of Refunding Debt - -
Premium on Issuance of Debt - -
Payment to Refunded Bond Escrow Agent - -
Transfers Out - -
Total Other Financing Sources (Uses) - -
Net Change in Fund Balance (178,744) 48,245
Fund Balance - January 1 347,757 381,494
Fund Balance - December 31 169,013$ 429,739$
108
Total
Series Series Series Debt
2020A 2010B 2007B Service
195,000$ 460,000$ -$ 746,758$
134,570 - - 363,481
329,570 460,000 - 1,110,239
485,000 470,000 - 1,330,000
119,834 27,560 - 222,250
63,516 655 - 65,483
668,350 498,215 - 1,617,733
(338,780) (38,215) - (507,494)
2,950,000 - - 2,950,000
312,200 - - 312,200
(3,170,000) - - (3,170,000)
- - (12,485) (12,485)
92,200 - (12,485) 79,715
(246,580) (38,215) (12,485) (427,779)
731,873 74,241 12,485 1,547,850
485,293$ 36,026$ -$ 1,120,071$
109
CITY OF OTSEGO, MINNESOTA
DEBT SERVICE FUND - SERIES 2012A
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Special Assessments 49,890$ 49,890$ 34,912$ (14,978)$
EXPENDITURES
Debt Service
Principal 205,000 205,000 205,000 -
Interest 8,000 8,000 8,000 -
Fiscal Agent Fees 500 500 656 156
Total Expenditures 213,500 213,500 213,656 156
Net Change in Fund Balance (163,610) (163,610) (178,744) (15,134)
Fund Balance - January 1 347,757 347,757 347,757 -
Fund Balance - December 31 184,147$ 184,147$ 169,013$ (15,134)$
110
CITY OF OTSEGO, MINNESOTA
DEBT SERVICE FUND - SERIES 2018A
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Property Taxes 91,757$ 91,757$ 91,758$ 1$
Special Assessments 159,120 159,120 193,999 34,879
Total Revenues 250,877 250,877 285,757 34,880
EXPENDITURES
Debt Service
Principal 170,000 170,000 170,000 -
Interest 66,856 66,856 66,856 -
Fiscal Agent Fees 500 500 656 156
Total Expenditures 237,356 237,356 237,512 156
Net Change in Fund Balance 13,521 13,521 48,245 34,724
Fund Balance - January 1 381,494 381,494 381,494 -
Fund Balance - December 31 395,015$ 395,015$ 429,739$ 34,724$
111
CITY OF OTSEGO, MINNESOTA
DEBT SERVICE FUND - SERIES 2020A
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Property Taxes 195,000$ 195,000$ 195,000$ -$
Special Assessments 114,770 114,770 134,570 19,800
Total Revenues 309,770 309,770 329,570 19,800
EXPENDITURES
Debt Service
Principal 485,000 485,000 485,000 -
Interest 93,784 93,784 119,834 26,050
Fiscal Agent Fees 1,000 1,000 63,516 62,516
Total Expenditures 579,784 579,784 668,350 88,566
Excess (Deficiency) of Revenues
Over (Under) Expenditures (270,014) (270,014) (338,780) (68,766)
OTHER FINANCING SOURCES
Issuance of Refunding Debt - - 2,950,000 2,950,000
Premium on Issuance of Debt - - 312,200 312,200
Payment to Refunded Bond Escrow Agent - - (3,170,000) (3,170,000)
Total Other Financing Sources (Uses) - - 92,200 92,200
Net Change in Fund Balance (270,014) (270,014) (246,580) 23,434
Fund Balance - January 1 731,873 731,873 731,873 -
Fund Balance - December 31 461,859$ 461,859$ 485,293$ 23,434$
112
CITY OF OTSEGO, MINNESOTA
DEBT SERVICE FUND - SERIES 2010B
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Property Taxes 460,000$ 460,000$ 460,000$ -$
EXPENDITURES
Debt Service
Principal 470,000 470,000 470,000 -
Interest 27,560 27,560 27,560 -
Fiscal Agent Fees 500 500 655 155
Total Expenditures 498,060 498,060 498,215 155
Net Change in Fund Balance (38,060) (38,060) (38,215) (155)
Fund Balance - January 1 74,241 74,241 74,241 -
Fund Balance - December 31 36,181$ 36,181$ 36,026$ (155)$
113
CITY OF OTSEGO, MINNESOTA
DEBT SERVICE FUND - SERIES 2007B
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2020
Variance with
Final Budget -
Budgeted Amounts Actual Over
Original Final Amounts (Under)
REVENUES
Special Assessments 11,376$ 11,376$ -$ (11,376)$
OTHER FINANCING SOURCES (USES)
Transfers Out - - (12,485) (12,485)
Net Change in Fund Balance 11,376 11,376 (12,485) (23,861)
Fund Balance - January 1 12,485 12,485 12,485 -
Fund Balance - December 31 23,861$ 23,861$ -$ (23,861)$
114
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
This part of the City of Otsego's comprehensive annual financial report presents detailed
information as a context for understanding what the financial statements, note disclosures, and
required supplementary information say about the City's overall financial health.Page No.
Financial Trends 116
These tables contain trend information to help the reader understand how the City's
financial performance and well-being have changed over time.
Revenue Capacity 130
These tables contain information to help the reader assess the City's most significant
local revenue source, the property tax.
Debt Capacity 136
These tables present information to help the reader assess the affordability of the City's
current level of outstanding debt and the City's ability to issue debt in the future.
Demographic and Economic Information 143
These tables offer demographic and economic indicators to help the reader understand
the environment within which the City's financial activities take place.
Operating Information 145
These tables contain service and infrastructure data to help the reader understand how
the information in the City's financial report relates to services the City provides and the
activities it performs.
Sources: Unless otherwise noted, the information in these tables is derived from the report for each respective year.
115
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2011 2012 2013 2014
Governmental Activities
Net Investment in Capital Assets 13,039,318$ 13,673,424$ 14,709,024$ 15,515,291$
Restricted 6,547,412 6,570,533 5,882,912 5,430,795
Unrestricted 8,490,450 7,850,150 7,313,054 9,601,854
Total Governmental Activities Net Position 28,077,180$ 28,094,107$ 27,904,990$ 30,547,940$
Business-type activities
Net Investment in Capital Assets 16,017,362$ 14,795,965$ 13,694,517$ 12,619,305$
Unrestricted 8,220,490 9,054,217 10,546,291 13,487,231
Total Business-type Activities Net Position 24,237,852$ 23,850,182$ 24,240,808$ 26,106,536$
Primary Government
Net Investment in Capital Assets 29,056,680$ 28,469,389$ 28,403,541$ 28,134,596$
Restricted 6,547,412 6,570,533 5,882,912 5,430,795
Unrestricted 16,710,940 16,904,367 17,859,345 23,089,085
Total Primary Government Net Position 52,315,032$ 51,944,289$ 52,145,798$ 56,654,476$
Sources: The data for this table has been extracted from the respective years report.
116
Table 1
2015 2016 2017 2018 2019 2020
15,303,426$ 19,103,702$ 21,496,582$ 25,330,507$ 31,373,524$ 34,622,760$
4,547,327 4,292,589 4,973,536 6,929,688 7,658,124 7,445,422
9,627,962 10,745,858 13,338,398 13,626,318 11,357,968 13,214,418
29,478,715$ 34,142,149$ 39,808,516$ 45,886,513$ 50,389,616$ 55,282,600$
11,553,869$ 15,889,294$ 20,504,751$ 24,701,888$ 31,344,999$ 36,563,803$
15,474,362 15,248,794 15,679,356 18,287,811 18,919,363 24,166,085
27,028,231$ 31,138,088$ 36,184,107$ 42,989,699$ 50,264,362$ 60,729,888$
26,857,295$ 34,992,996$ 42,001,333$ 50,032,395$ 62,718,523$ 71,186,563$
4,547,327 4,292,589 4,973,536 6,929,688 7,658,124 7,445,422
25,102,324 25,994,652 29,017,754 31,914,129 30,277,331 37,380,503
56,506,946$ 65,280,237$ 75,992,623$ 88,876,212$ 100,653,978$ 116,012,488$
117
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES
Last Ten Fiscal Years
(accrual basis of accounting)
2011 2012 2013 2014
GOVERNMENTAL ACTIVITIES
Expenses
General Government 956,651$ 1,002,690$ 906,102$ 1,230,335$
Public Safety 1,647,285 1,445,397 1,447,887 1,499,538
Public Works 2,114,975 2,486,553 2,760,130 2,383,890
Culture and Recreation 569,431 575,592 573,581 792,525
Economic Development 12,353 103,884 75,303 45,024
Interest on Long-term Debt 661,447 631,129 543,821 347,503
Total Expenses 5,962,142 6,245,245 6,306,824 6,298,815
Program Revenues
Charges for Services
General Government 109,686 54,674 36,735 119,757
Public Safety 819,537 588,894 784,038 1,159,073
Public Works 111,873 50,906 106,913 724,009
Culture and Recreation 3,101 8,840 28,600 43,606
Operating Grants and Contributions 197,325 203,645 220,790 233,606
Capital Grants and Contributions 233,832 620,574 485,533 1,619,209
Total Program Revenues 1,475,354 1,527,533 1,662,609 3,899,260
Net (Expense) / Revenue (4,486,788) (4,717,712) (4,644,215) (2,399,555)
General Revenues and Transfers
Taxes
Property 3,719,778 4,271,751 4,333,972 4,476,810
Tax Increments - - - -
Franchise Taxes 100,176 106,547 83,681 120,964
Unrestricted Grants and Contributions 26,051 54,601 10,954 132,104
Investment Earnings (net) 290,962 212,731 (17,852) 157,640
Gain on Disposal of Capital Assets 16,500 40,009 44,343 32,355
Transfers 44,000 49,000 - 122,632
Transfers - Capital Assets - - - -
Total General Revenues and Transfers 4,197,467 4,734,639 4,455,098 5,042,505
Change in Net Position (289,321)$ 16,927$ (189,117)$ 2,642,950$
118
Table 2
Page 1 of 3
2015 2016 2017 2018 2019 2020
1,174,510$ 1,376,793$ 1,085,554$ 1,228,607$ 1,383,291$ 1,616,634$
1,670,627 1,846,459 1,906,843 2,207,699 2,411,751 2,683,103
6,521,708 3,389,909 2,618,584 3,348,200 3,387,481 4,967,363
792,936 847,553 1,013,252 1,095,151 1,177,721 1,151,569
145,771 302,296 365,768 223,175 741,705 889,173
231,242 223,938 197,282 276,423 212,402 247,702
10,536,794 7,986,948 7,187,283 8,379,255 9,314,351 11,555,544
36,235 81,876 100,125 118,219 639,077 651,770
1,191,134 1,677,788 1,384,626 1,698,522 1,726,367 2,552,748
247,260 656,570 805,248 942,042 127,176 174,321
52,075 59,236 67,112 80,047 71,553 22,852
244,497 248,910 261,814 328,410 319,332 366,461
3,154,662 4,437,611 3,957,672 5,800,583 3,361,497 3,212,230
4,925,863 7,161,991 6,576,597 8,967,823 6,245,002 6,980,382
(5,610,931) (824,957) (610,686) 588,568 (3,069,349) (4,575,162)
4,602,153 4,963,787 5,572,250 6,078,341 6,681,989 7,170,868
- - - 96,938 97,419 275,445
128,722 131,229 135,652 139,161 137,510 132,137
242,970 255,951 231,683 191,570 162,120 1,411,685
55,909 82,385 124,052 263,784 754,079 625,964
35,600 31,160 38,373 37,563 47,362 -
284,586 186,755 195,686 207,840 212,869 262,369
- (162,876) (20,643) (1,525,768) (520,896) (410,322)
5,349,940 5,488,391 6,277,053 5,489,429 7,572,452 9,468,146
(260,991)$ 4,663,434$ 5,666,367$ 6,077,997$ 4,503,103$ 4,892,984$
119
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED
Last Ten Fiscal Years
(accrual basis of accounting)
2011 2012 2013 2014
BUSINESS-TYPE ACTIVITIES
Expenses
Water Utility 1,530,108$ 1,301,990$ 1,241,343$ 1,187,553$
Sanitary Sewer Utility 2,778,657 2,326,550 2,123,381 2,052,493
Storm Water Utility 61,024 69,834 72,944 57,977
Total Expenses 4,369,789 3,698,374 3,437,668 3,298,023
Program Revenues
Charges for Services
Water Utility 736,448 1,049,531 1,259,942 1,167,066
Sanitary Sewer Utility 1,067,088 1,055,557 1,186,523 1,325,181
Storm Water Utility 98,873 69,608 41,831 45,570
Operating Grants and Contributions - - - -
Capital Grants and Contributions 333,151 1,032,687 1,267,189 2,560,270
Total Program Revenues 2,235,560 3,207,383 3,755,485 5,098,087
Net (Expense) / Revenue (2,134,229) (490,991) 317,817 1,800,064
General Revenues and Transfers
Property Taxes - - 57,739 24,824
Investment Earnings (net) 235,166 152,321 (34,717) 168,320
Gain on Disposal of Capital Assets - - 18,733 28,440
Transfers (44,000) (49,000) - (122,632)
Transfers - Capital Assets - - - -
Total General Revenues and Transfers 191,166 103,321 41,755 98,952
Change in Net Position (1,943,063)$ (387,670)$ 359,572$ 1,899,016$
120
Table 2
Page 2 of 3
2015 2016 2017 2018 2019 2020
1,246,064$ 1,276,338$ 1,377,537$ 1,468,485$ 1,729,938$ 1,443,522$
2,207,811 2,480,519 2,477,995 2,561,070 2,600,436 2,739,519
95,533 42,342 62,172 71,040 123,163 138,985
3,549,408 3,799,199 3,917,704 4,100,595 4,453,537 4,322,026
1,261,303 1,334,442 1,529,127 1,754,947 1,734,090 2,108,577
1,479,703 1,601,172 1,744,067 1,932,885 2,254,688 2,473,673
76,211 75,932 94,919 104,916 109,372 120,579
- - - - - 2,157
2,020,299 4,766,947 5,591,332 5,500,794 6,543,224 9,214,377
4,837,516 7,778,493 8,959,445 9,293,542 10,641,374 13,919,363
1,288,108 3,979,294 5,041,741 5,192,947 6,187,837 9,597,337
25,000 25,000 25,000 26,000 30,000 32,000
85,259 129,442 154,321 260,833 748,799 688,236
- - - 7,884 - -
(284,586) (186,755) (195,686) (207,840) (212,869) (262,369)
- 162,876 20,643 1,525,768 520,896 410,322
(174,327) 130,563 4,278 1,612,645 1,086,826 868,189
1,113,781$ 4,109,857$ 5,046,019$ 6,805,592$ 7,274,663$ 10,465,526$
121
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED
Last Ten Fiscal Years
(accrual basis of accounting)
2011 2012 2013 2014
TOTAL PRIMARY GOVERNMENT
Expenses
Governmental Activities 5,962,142$ 6,245,245$ 6,306,824$ 6,298,815$
Business-type Activities 4,369,789 3,698,374 3,437,668 3,298,023
Total Expenses 10,331,931 9,943,619 9,744,492 9,596,838
Program Revenues
Governmental Activities 1,475,354 1,527,533 1,662,609 3,899,260
Business-type Activities 2,235,560 3,207,383 3,755,485 5,098,087
Total Program Revenues 3,710,914 4,734,916 5,418,094 8,997,347
Net (Expense) / Revenue (6,621,017) (5,208,703) (4,326,398) (599,491)
General Revenues and Transfers
Governmental Activities 4,197,467 4,734,639 4,455,098 5,042,505
Business-type Activities 191,166 103,321 41,755 98,952
Total General Revenues and Transfers 4,388,633 4,837,960 4,496,853 5,141,457
Change in Net Position (2,232,384)$ (370,743)$ 170,455$ 4,541,966$
Sources: The data for this table has been extracted from the respective years report.
122
Table 2
Page 3 of 3
2015 2016 2017 2018 2019 2020
10,536,794$ 7,986,948$ 7,187,283$ 8,379,255$ 9,314,351$ 11,555,544$
3,549,408 3,799,199 3,917,704 4,100,595 4,453,537 4,322,026
14,086,202 11,786,147 11,104,987 12,479,850 13,767,888 15,877,570
4,925,863 7,161,991 6,576,597 8,967,823 6,245,002 6,980,382
4,837,516 7,778,493 8,959,445 9,293,542 10,641,374 13,919,363
9,763,379 14,940,484 15,536,042 18,261,365 16,886,376 20,899,745
(4,322,823) 3,154,337 4,431,055 5,781,515 3,118,488 5,022,175
5,349,940 5,488,391 6,277,053 5,489,429 7,572,452 9,468,146
(174,327) 130,563 4,278 1,612,645 1,086,826 868,189
5,175,613 5,618,954 6,281,331 7,102,074 8,659,278 10,336,335
852,790$ 8,773,291$ 10,712,386$ 12,883,589$ 11,777,766$ 15,358,510$
123
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
GOVERNMENTAL ACTIVITIES TAX REVENUE BY SOURCE Table 3
Last Ten Fiscal Years
(accrual basis of accounting)
Property Tax Franchise
Taxes Increments Taxes Total
2011 3,719,778$ -$ 100,176$ 3,819,954$
2012 4,271,751 - 106,547 4,378,298
2013 4,333,972 - 83,681 4,417,653
2014 4,476,810 - 120,964 4,597,774
2015 4,602,153 - 128,722 4,730,875
2016 4,963,787 - 131,229 5,095,016
2017 5,572,250 - 135,652 5,707,902
2018 6,078,341 96,938 139,161 6,314,440
2019 6,681,989 97,419 137,510 6,916,918
2020 7,170,868 275,445 132,137 7,578,450
Sources: The data for this table has been extracted from the respective years report.
124
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125
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2011 2012 2013 2014
General Fund
Nonspendable -$ 11,254$ 11,254$ 80,423$
Assigned 81,168 87,971 103,418 101,833
Unassigned 1,622,430 1,665,366 1,797,403 3,211,382
Total General Fund 1,703,598$ 1,764,591$ 1,912,075$ 3,393,638$
All Other Governmental Funds
Nonspendable -$ 4,601$ 351$ -$
Restricted 5,985,647 7,898,825 8,805,554 2,576,729
Committed 39,142 52,360 595,191 387,033
Assigned 6,517,609 5,605,265 4,267,012 5,218,020
Unassigned (700,854) (341,194) (9,555) (10,584)
Total All Other Governmental Funds 11,841,544$ 13,219,857$ 13,658,553$ 8,171,198$
Sources: The data for this table has been extracted from the respective years report.
Note: During 2011, the City implemented GASB Statement No. 54, Fund Balance and Governmental Fund Type Definitions.
126
Table 4
2015 2016 2017 2018 2019 2020
105,547$ 110,973$ 317,197$ 320,887$ 323,124$ 334,946$
128,646 192,408 205,257 205,449 223,740 242,785
2,656,330 3,342,821 3,368,191 3,587,331 3,772,946 5,410,002
2,890,523$ 3,646,202$ 3,890,645$ 4,113,667$ 4,319,810$ 5,987,733$
2,675$ 2,000$ 1,325$ 650$ -$ -$
2,278,379 1,931,757 3,290,750 4,167,765 5,226,784 5,472,554
406,683 419,829 474,863 448,699 438,676 484,582
6,825,237 7,221,257 9,098,697 10,526,550 11,492,028 11,401,232
(26,070) (281,273) (355,150) (1,790,236) (4,463,532) (4,235,228)
9,486,904$ 9,293,570$ 12,510,485$ 13,353,428$ 12,693,956$ 13,123,140$
127
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2011 2012 2013 2014
Revenues
Property Taxes 3,886,919$ 4,344,415$ 4,564,068$ 4,524,092$
Tax Increments - - - -
Franchise Taxes - - - 120,964
Licenses and Permits 303,059 553,577 819,493 1,238,823
Intergovernmental 375,703 621,447 241,996 1,034,552
Charges for Services 200,256 86,655 170,194 1,142,453
Special Assessments 2,055,623 875,822 1,987,647 905,441
Fines and Forfeitures 1,000 2,000 - 4,000
Investment Earnings (net) 290,962 209,984 (17,852) 157,640
Miscellaneous 25,302 56,625 78,457 50,286
Total Revenues 7,138,824 6,750,525 7,844,003 9,178,251
Expenditures
General Government 887,847 918,055 923,255 1,169,697
Public Safety 1,586,504 1,440,908 1,447,182 1,495,008
Public Works 974,557 1,009,827 1,121,981 1,023,693
Culture and Recreation 246,075 277,605 313,023 464,840
Economic Development 12,353 103,884 75,303 45,024
Capital Outlay 1,178,526 1,707,346 1,984,531 1,688,847
Debt Service
Principal 745,000 810,000 840,000 6,965,000
Interest 489,184 554,245 574,715 454,566
Bond Issuance & Fiscal Agent Fee's 86,285 42,900 - -
Total Expenditures 6,206,331 6,864,770 7,279,990 13,306,675
Excess (Deficiency) of Revenues
Over (Under) Expenditures 932,493 (114,245) 564,013 (4,128,424)
Other Financing Sources (Uses)
Transfers In 2,069,009 997,325 - 612,433
Issuance of Debt 4,640,000 1,400,000 - -
Premium on Issuance of Debt 48,529 64,542 - -
Sales of Capital Assets - 40,009 - -
Payment to Refunded Bond Escrow Agent - - - -
Insurance Recovery - - 22,167 -
Transfers Out (2,025,009) (948,325) - (489,801)
Total Other Financing Sources (Uses) 4,732,529 1,553,551 22,167 122,632
Net Change in Fund Balances 5,665,022$ 1,439,306$ 586,180$ (4,005,792)$
Debt Service as a Percentage of
Noncapital Expenditures 22.68%22.37%23.32%60.23%
Sources: The data for this table has been extracted from the respective years report.
128
Table 5
2015 2016 2017 2018 2019 2020
4,651,453$ 4,960,518$ 5,595,120$ 6,084,051$ 6,662,307$ 7,141,972$
- - - 96,938 97,419 275,445
128,722 131,229 135,652 139,161 137,510 132,137
1,179,136 1,661,565 1,363,384 1,672,906 1,699,879 2,532,789
3,570,630 2,111,727 1,093,154 2,339,286 1,801,414 2,541,072
555,660 1,274,578 2,129,514 2,328,991 2,130,542 1,994,941
560,748 575,155 734,522 508,865 586,109 457,606
11,998 16,223 21,092 25,616 26,488 19,959
55,909 82,385 124,052 263,784 754,079 625,964
105,573 119,732 294,909 233,946 141,533 149,472
10,819,829 10,933,112 11,491,399 13,693,544 14,037,280 15,871,357
1,141,113 1,233,680 1,072,195 1,182,959 1,313,178 1,479,856
1,664,031 1,807,985 1,886,661 2,168,187 2,379,440 2,667,435
1,044,024 1,019,946 1,066,349 1,205,464 1,683,958 1,640,892
466,205 534,122 587,739 654,786 710,406 695,747
145,771 196,534 195,716 223,175 265,498 889,173
4,477,153 4,349,555 2,160,857 8,422,796 7,001,285 5,137,983
1,130,000 1,210,000 1,125,000 1,160,000 1,185,000 1,330,000
256,148 233,498 206,748 182,875 230,217 222,250
2,979 3,362 3,267 74,512 2,874 65,483
10,327,424 10,588,682 8,304,532 15,274,754 14,771,856 14,128,819
492,405 344,430 3,186,867 (1,581,210) (734,576) 1,742,538
1,574,500 648,087 1,278,609 1,397,210 1,274,595 2,465,348
- - - 2,305,000 - 2,950,000
- - - 58,475 - 312,200
35,600 31,160 78,805 75,860 68,378 -
- - - - - (3,170,000)
- - - - - -
(1,289,914) (461,332) (1,082,923) (1,189,370) (1,061,726) (2,202,979)
320,186 217,915 274,491 2,647,175 281,247 354,569
812,591$ 562,345$ 3,461,358$ 1,065,965$ (453,329)$ 2,097,107$
14.22%18.40%19.32%16.69%15.85%13.82%
129
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
ESTIMATED ACTUAL VALUE, TAXABLE MARKET VALUE AND TAX CAPACITY OF TAXABLE PROPERTY
Last Ten Fiscal Years
2011 2012 2013 2014
Estimated Actual Value 1,122,091,900$ 1,070,068,000$ 989,365,300$ 1,051,543,200$
Taxable Market Value
Real Estate 1,045,413,800$ 913,874,900$ 839,428,800$ 908,532,000$
Personal Property 14,203,900 14,003,900 14,305,700 14,513,300
Total Taxable Market Value 1,059,617,700$ 927,878,800$ 853,734,500$ 923,045,300$
Taxable Market Value as a Percentage
of Estimated Actual Value 94.43%86.71%86.29%87.78%
Tax Capacity
Real Estate 11,376,627$ 9,999,046$ 9,184,748$ 9,805,499$
Personal Property 283,499 279,502 285,540 290,266
Net Tax Capacity for Direct Rate 11,660,126$ 10,278,548$ 9,470,288$ 10,095,765$
Net Tax Capacity as a Percentage
of Estimated Actual Value 1.04%0.96%0.96%0.96%
Property Tax Levies
General Revenues 3,500,000$ 3,836,000$ 3,952,910$ 4,024,715$
Debt Service 466,000 425,000 425,000 475,285
Total Property Taxes Levied 3,966,000$ 4,261,000$ 4,377,910$ 4,500,000$
Tax Rates
General Revenues 30.017 37.320 41.740 39.865
Debt Service 3.997 4.135 4.488 4.708
Total Direct Tax Rate 34.013 41.455 46.228 44.573
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
130
Table 6
2015 2016 2017 2018 2019 2020
1,177,857,500$ 1,340,579,000$ 1,473,986,500$ 1,644,926,700$ 1,837,875,900$ 2,043,966,400$
1,039,579,100$ 1,195,720,700$ 1,327,925,100$ 1,490,919,200$ 1,666,323,700$ 1,864,979,200$
14,952,700 16,476,000 20,388,300 23,397,400 29,560,400 27,109,100
1,054,531,800$ 1,212,196,700$ 1,348,313,400$ 1,514,316,600$ 1,695,884,100$ 1,892,088,300$
89.53%90.42%91.47%92.06%92.27%92.57%
11,060,135$ 12,909,476$ 14,465,922$ 16,228,630$ 18,029,678$ 19,955,742$
298,480 328,948 407,194 467,378 578,862 541,536
11,358,615$ 13,238,424$ 14,873,116$ 16,696,008$ 18,608,540$ 20,497,278$
0.96%0.99%1.01%1.02%1.01%1.00%
4,070,000$ 4,380,206$ 4,974,745$ 5,448,302$ 5,975,816$ 6,447,491$
610,000 640,000 655,000 655,000 734,293 746,758
4,680,000$ 5,020,206$ 5,629,745$ 6,103,302$ 6,710,109$ 7,194,249$
35.832 33.087 33.448 32.632 32.114 31.456
5.370 4.834 4.404 3.923 3.946 3.643
41.202 37.921 37.852 36.555 36.060 35.099
131
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
TAX CAPACITY OF REAL ESTATE & PERSONAL PROPERTY Table 7
Last Ten Fiscal Years
Non Commercial Personal
Homestead Homestead & Industrial Agricultural Property Other Total
2011 7,547,244$ 1,251,967$ 1,893,120$ 606,587$ 283,499$ 77,709$ 11,660,126$
64.73% 10.74% 16.24%5.20%2.43%0.67% 100.00%
2012 6,460,276 1,097,107 1,821,302 543,596 279,502 76,765 10,278,548
62.85% 10.67% 17.72%5.29%2.72%0.75% 100.00%
2013 5,906,265 903,006 1,788,872 533,264 285,540 53,341 9,470,288
62.37% 9.54% 18.89% 5.63% 3.02% 0.56% 100.00%
2014 6,607,296 918,439 1,664,605 536,842 290,266 78,317 10,095,765
65.45% 9.10% 16.49% 5.32% 2.88% 0.78% 100.00%
2015 7,732,867 1,057,409 1,633,988 582,530 298,480 53,341 11,358,615
68.08% 9.31% 14.39% 5.13% 2.63% 0.47% 100.00%
2016 8,878,089 1,183,843 2,166,341 627,666 328,948 53,537 13,238,424
67.06% 8.94% 16.36% 4.74% 2.48% 0.40% 100.00%
2017 9,942,548 1,232,700 2,627,164 597,483 407,194 66,027 14,873,116
66.85% 8.29% 17.66% 4.02% 2.74% 0.44% 100.00%
2018 11,298,428 1,276,749 2,981,199 612,928 467,378 59,326 16,696,008
67.67% 7.65% 17.86% 3.67% 2.80% 0.36% 100.00%
2019 12,807,798 1,481,672 3,017,858 667,248 578,862 55,102 18,608,540
68.83% 7.96% 16.22% 3.59% 3.11% 0.30% 100.00%
2020 14,392,621 1,899,299 2,935,016 670,618 541,536 58,188 20,497,278
70.22% 9.27% 14.32% 3.27% 2.64% 0.28% 100.00%
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
Residential
132
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PROPERTY TAX RATES - DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years Table 8
General Debt School School School School School School
Revenues Service Total District 728 District 882 District 885 County District 728 District 882 District 885
2011 30.017 3.997 34.013 43.489 27.029 51.369 39.306 116.808 100.348 124.688
2012 37.320 4.135 41.455 45.548 28.262 52.646 43.452 130.455 113.169 137.553
2013 41.740 4.488 46.228 50.058 26.229 57.213 44.288 140.574 116.745 147.729
2014 39.865 4.708 44.573 51.286 28.269 51.570 43.450 139.309 116.292 139.593
2015 35.832 5.370 41.202 42.483 22.882 51.082 40.593 124.278 104.677 132.877
2016 33.087 4.834 37.921 39.266 20.857 49.102 39.970 117.157 98.748 126.993
2017 33.448 4.404 37.852 36.659 16.242 46.893 39.599 114.110 93.693 124.344
2018 32.632 3.923 36.555 36.137 15.621 47.950 39.946 112.638 92.122 124.451
2019 32.114 3.946 36.060 32.865 16.972 47.143 44.273 113.198 97.305 127.476
2020 31.456 3.643 35.099 34.371 15.865 45.280 44.421 113.891 95.385 124.800
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
Overlapping Rates Total Direct & OverlappingDirect Rates
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CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PRINCIPAL PROPERTY TAXPAYERS Table 9
Current Year and Nine Years Ago
2020 2011
Percentage of Percentage of
Net Tax Total Tax Net Tax Total Tax
Taxpayer Classification Capacity Rank Capacity Value Capacity Rank Capacity Value
Duke Realty Industrial 1,087,958$ 1 5.31%256,574$ 1 2.20%
Centerpoint Energy Utility 355,928 2 1.74%142,430 3 1.22%
Target Corporation Commercial 199,450 3 0.97%248,514 2 2.13%
Wagner Spray Tech Corporation Industrial 173,718 4 0.85%0.00%
Evans Park, Inc.Apartments 156,893 5 0.77%0.00%
Ahava Realty ADA Compliant LP Industrial 140,490 6 0.69%0.00%
Wright-Hennepin Co-op Electric Utility 126,920 7 0.62%92,439 7 0.79%
Elk Inn Partners LP Commercial 99,250 8 0.48%99,250 6 0.85%
P & F Properties, Inc.Industrial 87,662 9 0.43%0.00%
Apex Business Center LLC Industrial 76,170 10 0.37%74,578 9 0.64%
OHW LLC Residential 112,157 5 0.96%
GCI Capital, Inc.Commercial 86,260 8 0.74%
Appello Group LLC Commercial 124,530 4 1.07%
Wells Fargo Bank NA Agricultural 70,396 10 0.60%
Totals 2,504,439$ 12.23%1,307,128$ 11.20%
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
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CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PROPERTY TAX LEVIES AND COLLECTIONS Table 10
Last Ten Fiscal Years
Collected within the
Certified Fiscal Year of the Levy Collections in Total Collections to Date
Property Percentage Subsequent Percentage
Tax Levy Amount of Levy Years Amount to Date
2011 3,966,000$ 3,820,747$ 96.34% 145,253$ 3,966,000$ 100.00%
2012 4,261,000 4,111,857 96.50% 149,143 4,261,000 100.00%
2013 4,377,910 4,306,802 98.38%71,108 4,377,910 100.00%
2014 4,500,000 4,444,153 98.76%55,847 4,500,000 100.00%
2015 4,680,000 4,641,720 99.18%34,573 4,676,293 99.92%
2016 5,020,206 4,979,508 99.19%39,673 5,019,181 99.98%
2017 5,629,745 5,606,101 99.58%21,690 5,627,791 99.97%
2018 6,103,302 6,084,700 99.70%16,027 6,100,727 99.96%
2019 6,710,109 6,670,163 99.40%27,231 6,697,394 99.81%
2020 7,194,249 7,134,792 99.17%- 7,134,792 99.17%
Sources: The data for this table has been provided by Wright County and from City financial maintenance documents.
Note: The components of the Certified Property Tax Levy can be viewed in table 6 of the statistical section.
135
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
RATIOS OF OUTSTANDING DEBT BY TYPE Table 11
Last Ten Fiscal Years
General General Notes Percentage
Obligation Equipment Obligation from Direct Total of Personal Per
Bonds Certificates Revenue Bonds Borrowings Debt Income Capita
2011 17,728,529$ 350,000$ 28,843,229$ -$ 46,921,758$ 9.17% 3,396$
2012 18,413,438 310,000 28,764,347 - 47,487,785 8.82% 3,384
2013 17,601,634 265,000 28,685,465 - 46,552,099 8.26% 3,220
2014 10,664,830 220,000 28,606,583 - 39,491,413 6.33% 2,638
2015 9,553,029 175,000 28,527,701 - 38,255,730 5.61% 2,473
2016 8,380,857 130,000 26,448,820 - 34,959,677 4.68% 2,182
2017 7,293,686 85,000 24,334,937 - 31,713,623 3.95% 1,910
2018 8,534,989 40,000 22,126,056 - 30,701,045 3.53% 1,772
2019 7,378,641 - 17,515,267 - 24,893,908 2.66% 1,373
2020 6,129,492 - 15,026,658 9,438,936 30,595,086 3.10% 1,598
Sources: The data for this table has been provided from City financial maintenance documents.
Note: More detailed information for Population and Personal Income can be viewed in table 16 of the statistical section.
Governmental Activities Business-Type Activites
136
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 12
Last Ten Fiscal Years
Total Percentage of
General General Less: Amounts Net General Estimated
Obligation Equipment Bonded Debt Restricted to Obligation Actual Value Per
Bonds Certificates Outstanding Debt Service Debt of Property Capita
2011 17,728,529$ 350,000$ 18,078,529$ 6,547,412 11,531,117$ 1.03% 835$
2012 18,413,438 310,000 18,723,438 6,570,533 12,152,905 1.14% 866
2013 17,601,634 265,000 17,866,634 5,882,912 11,983,722 1.21% 829
2014 10,664,830 220,000 10,884,830 5,430,795 5,454,035 0.52% 364
2015 9,553,029 175,000 9,728,029 4,506,243 5,221,786 0.44% 337
2016 8,380,857 130,000 8,510,857 4,292,589 4,218,268 0.31% 263
2017 7,293,686 85,000 7,378,686 3,596,348 3,782,338 0.26% 228
2018 8,534,989 40,000 8,574,989 4,484,680 4,090,309 0.25% 236
2019 7,378,641 - 7,378,641 3,979,190 3,399,451 0.18% 188
2020 6,129,492 - 6,129,492 3,076,069 3,053,423 0.15% 160
Sources: The data for this table has been provided from City financial maintenance documents.
Note: More detailed information for Population can be viewed in table 16 of the statistical section.
Note: More detailed information for Estimated Property Values can be viewed in table 6 of the statistical section.
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CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
COMPUTATION OF DIRECT AND OVERLAPPING Table 13
GOVERNMENTAL ACTIVITIES DEBT
DECEMBER 31, 2020
Estimated Estimated Share
Debt Percentage of Overlapping
Governmental Unit Outstanding Applicable Debt
Overlapping Debt:
School Districts:
No. 728 - Elk River 207,155,000$ 19.43% 40,250,217$
No. 882 - Monticello 49,895,000 3.97% 1,980,832
No. 885 - St. Michael-Albertville 167,170,000 4.42% 7,388,914
Wright County 153,290,000 11.61% 17,796,969
Total Overlapping Debt 577,510,000$ 67,416,931
City of Otsego Direct Debt 6,129,492
Total Direct and Overlapping Debt 73,546,423$
Sources: The majority of the data for this table has been provided by Wright County Auditor / Treasurer's Office.
Sources: The remaining data for this table was provided by School District No. 728.
Note: More detailed information for the City's outstanding debt can be viewed in table 11 of the statistical section.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. The 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.
Note: The percentage of overlapping debt applicable is estimated using tax capacity values. Applicable percentages were estimated
by determining the portion of each entity's tax capacity that is within the City's boundaries, and dividing it by the entity's
total tax capacity.
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CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2011 2012 2013 2014
Taxable Market Value 1,059,617,700$ 927,878,800$ 853,734,500$ 923,045,300$
Debt Limit Percentage 3.00% 3.00% 3.00% 3.00%
Debt Limit 31,788,531 27,836,364 25,612,035 27,691,359
Total Net Debt Applicable to Limit 11,531,117 12,152,905 11,983,722 5,454,035
Legal Debt Margin 20,257,414$ 15,683,459$ 13,628,313$ 22,237,324$
Total Net Debt Applicable to the Limit
as a Percentage of Debt Limit 36.27% 43.66% 46.79% 19.70%
Sources: The data for this table has been provided by Wright County and from City financial maintenance documents.
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Table 14
2015 2016 2017 2018 2019 2020
1,054,531,800$ 1,212,196,700$ 1,348,313,400$ 1,514,316,600$ 1,695,884,100$ 1,892,088,300$
3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
31,635,954 36,365,901 40,449,402 45,429,498 50,876,523 56,762,649
5,221,786 4,218,268 3,782,338 4,090,309 3,399,451 3,053,423
26,414,168$ 32,147,633$ 36,667,064$ 41,339,189$ 47,477,072$ 53,709,226$
16.51% 11.60% 9.35% 9.00% 6.68% 5.38%
141
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PLEDGED-REVENUE COVERAGE Table 15
Last Ten Fiscal Years
Water and Water and
Sanitary Sewer Sanitary Sewer Less: Net
Utility Connection Operating Available Debt Service
Charges Charges Expenses Revenue Principal Interest Coverage
2011 2,038,433 333,151 1,228,236 1,143,348$ -$ 1,343,403 85.11%
2012 2,256,616 1,032,687 1,148,605 2,140,698 - 1,006,961 212.59%
2013 2,429,661 1,233,224 1,136,790 2,526,095 - 1,007,100 250.83%
2014 2,687,572 2,435,460 1,016,382 4,106,650 - 1,007,585 407.57%
2015 2,641,566 2,020,299 2,524,073 2,137,792 - 1,007,762 212.13%
2016 2,857,174 3,662,097 2,831,346 3,687,925 2,000,000 1,007,725 122.62%
2017 3,197,486 3,577,039 2,973,383 3,801,142 2,035,000 967,815 126.59%
2018 3,588,031 4,195,354 3,229,493 4,553,892 2,130,000 886,043 150.99%
2019 3,872,764 4,930,688 3,544,713 5,258,739 4,531,906 883,087 97.11%
2020 4,482,841 7,428,178 3,704,373 8,206,646 2,335,000 603,612 279.27%
Sources: The data for this table has been provided from City financial maintenance documents.
General Obligation Revenue Bonds
142
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 16
Last Ten Fiscal Years
School Enrollments
Per Capita No. 885
No. of Personal Personal Unemployment Median No. 728 No. 882 St. Michael
Population Households Income Income Rate Age Elk River Monticello Albertville
2011 13,816 4,826 511,523,584$ 37,024 6.8%32.4 12,801 4,110 5,497
2012 14,034 4,894 538,231,968 38,352 5.9%33.4 12,753 4,137 5,645
2013 14,457 5,035 563,823,000 39,000 5.0%33.4 13,123 4,137 5,747
2014 14,968 5,218 623,821,336 41,677 4.2%33.8 13,076 4,193 5,904
2015 15,472 5,394 682,361,616 44,103 3.7%34.1 13,136 4,096 6,096
2016 16,019 5,580 746,373,267 46,593 3.9%33.2 13,219 4,094 6,286
2017 16,605 5,787 803,366,505 48,381 3.5%34.3 13,461 4,168 6,335
2018 17,323 5,975 869,285,463 50,181 3.0%34.7 13,670 4,125 6,463
2019 18,130 6,254 935,671,170 51,609 3.3%34.3 13,921 4,201 6,557
2020 19,140 6,657 987,813,284 51,609 5.2%34.3 13,464 4,072 6,366
Sources: Population & Households - Minnesota State Demographer [2020 Estimated by City]
Personal Income - Calculated by the City
Per Capita Personal Income - US Department of Commerce; Bureau of Economic Analysis
Unemployment Rate - Minnesota Department of Employment and Economic Development
Median Age - US Department of Commerce, Bureau of the Census
School Enrollment - Minnesota Department of Education
Note: Some data was not yet available for 2020. In those instances, 2019 data was shown for the current year.
143
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PRINCIPAL EMPLOYMENT SECTORS Table 17
Current Year and Nine Years Ago
Percentage of Percentage of
Total City Total City
Employment Industry Employees Rank Employment Employees Rank Employment
Education & Health Services 1,247 1 35.58%144 5 10.06%
Trade, Transportation & Utilities 879 2 25.08% 447 1 31.24%
Leisure & Hospitality 314 3 8.96% 291 2 20.34%
Construction 401 4 11.44% 188 3 13.14%
Professional & Business Services 286 5 8.16% 149 4 10.41%
Other Services 83 6 2.37% 114 6 7.97%
Public Administration 35 8 1.00% 20 7 1.40%
Financial Activities 82 7 2.34% 0.00%
Totals 3,327 94.92% 1,353 94.55%
Sources: The data for this table has been provided from the Minnesota Department of Employment and Economic Development.
Note: Due to data privacy within the State, data for principal employers of the City is not available. Given this limitation, the
City determined it was appropriate to provide data regarding employment industry data. The City felt that this data would still
provide the user information to understand the degree to which the City's economy is or is not dependent on a certain
employment sector.
2020 2011
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CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
FULL TIME CITY GOVERNMENT POSITIONS BY FUNCTION Table 18
Last Ten Fiscal Years
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
General Government
Administration 3.0 3.0 3.0 3.0 4.0 3.5 3.6 3.6 3.6 4.0
Finance 3.9 3.9 3.7 3.9 3.0 3.0 3.0 3.0 3.0 3.0
Total General Government 6.9 6.9 6.7 6.9 7.0 6.5 6.6 6.6 6.6 7.0
Public Safety
Police - - - - - - - - - -
Fire - - - - - - - - - -
Building Inspections 1.0 1.0 1.0 1.0 1.0 1.5 1.5 1.8 2.0 2.0
Total Public Safety 1.0 1.0 1.0 1.0 1.0 1.5 1.5 1.8 2.0 2.0
Public Works
Street Maintenance 6.9 5.9 5.8 5.8 6.9 6.9 6.9 6.9 7.8 7.8
Mechanic - 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Total Public Works 6.9 6.9 6.8 6.8 7.9 7.9 7.9 7.9 8.8 8.8
Culture and Recreation
Parks Maintenance 1.0 1.4 1.4 1.4 3.5 3.5 3.5 3.9 4.4 4.4
Recreation - 0.6 1.1 1.1 1.4 1.4 1.4 1.5 1.5 2.0
Total Culture and Recreation 1.0 2.0 2.5 2.5 4.9 4.9 4.9 5.4 5.9 6.4
Public Utilities
Water Utility - - 2.0 2.0 1.3 1.3 1.3 1.4 1.5 1.8
Sanitary Sewer Utility - - 2.0 2.0 3.7 3.7 3.7 4.1 4.5 5.4
Total Public Utilities - - 4.0 4.0 5.0 5.0 5.0 5.5 6.0 7.2
Total 15.8 16.8 21.0 21.2 25.8 25.8 25.9 27.2 29.3 31.4
Sources: The data for this table has been provided from City financial maintenance documents.
Note: Police and Fire services are contracted services with Wright County and neighboring Cities respectively, therefore no City employees.
Note: Public Utilities staffing were contracted with a service provider through 2012. In 2013, the City hired a staff and assumed operations.
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CITY OF OTSEGO, MINNESOTASTATISTICAL SECTION (UNAUDITED)OPERATING INDICATORS BY FUNCTIONTable 19Last Ten Fiscal YearsFunction 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020AdministrationRental Licenses Issued 246 292 337 372 372 387 351 329 332 300Code Enforcement Citations 60 89 20 16 31 41 30 68 18 37Registered Voters 7,168 7,329 9,324 9,754 13,081Actual Votes Tallied 4,737 7,126 4,693 7,362 6,228 11,389PoliceTotal Calls for Service 4,111 4,234 3,856 4,060 3,575 3,619 4,310 4,2794,484 4,145FireCalls - Albertville Department82 76 93 129 131 164 158Calls - Elk River Department74 73 80 92 96 105 92Calls - Rogers Department18 15 12 27 26 28Building InspectionsNumber of Permits - All Types 570 645 699 692 893 968 722 1,147 1,173 1,791New Homes Constructed58143190188207219210300300403Public WorksMiles of Streets Constructed0.45 1.33 2.30 1.66 2.59 3.93 7.80 4.68 1.47 Miles of Streets Reconstructed0.35 1.80 5.30 - 0.78 Snow Plowing Events40 46 37 22 16 16 22 37 21 11 Culture and RecreationParks Acres Maintained167.8 167.8 184.3 184.3 184.3 190.3 160.0 160.0 160.0 173.0 Prairie Festival Attendance4,900 5,100 6,200 5,000 4,000 4,800 6,450 - Recreation Programs Offered17 60 106 132 100 127 231 153 52 Recreation Programs Participants550 9,875 14,958 12,662 12,662 17,341 20,885 18,500 5,359 Water UtilityConnections2,3792,5172,6782,8293,0233,1553,2783,7484,0144,335Gallons Delivered353,515,800 429,293,500 409,492,730 37,529,984 389,118,330 393,795,210 491,484,000 527,795,004 491,047,000 632,552,814 Sanitary Sewer UtilityAverage Daily Gallons Treated512,000 485,000 543,000 539,000 551,000 600,000 627,000 673,000 738,000 798,000 Sources: The data for this table has been provided by each respective City department.Note: The City made significant changes to the indicators included in this table for 2015. Not all historical data was able to be compiled, and this table will be updated on a go-forward basis.146
CITY OF OTSEGO, MINNESOTASTATISTICAL SECTION (UNAUDITED)CAPITAL ASSET STATISTICS BY FUNCTIONTable 20Last Ten Fiscal YearsFunction 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Public WorksStreet Miles (MSA) 112.85 113.30 114.63 116.93 118.59 120.88 124.81 131.00 131.00 134.41 Heavy Duty Trucks 8 8 8 8 8 8 8 9 9 9 Light Duty Vehicles 10 11 15 15 15 15 17 17 16 19 Tractors & Grading Equipment 8 8 8 8 8 8 8 7 7 6 Culture and RecreationTrail Miles 19.68 19.68 19.68 19.68 19.96 21.13 25.11 25.60 27.95 38.31 Number of Parks 8 8 10 10 10 11 12 14 14 14 Playgrounds 6 7 7 7 7 8 9 10 10 14 Park Shelters 9 9 9 9 9 10 10 12 13 13 Ball Fields 5 5 5 5 5 6 6 6 6 7 Soccer Fields- - - - 3 3 3 3 3 3 Basketball Courts5 5 5 5 5 5 5 6 6 7 Tennis Courts7 7 7 7 7 8 8 8 8 8 Outdoor Ice Rinks1 1 1 1 1 1 1 2 Mowing Equipment4 5 5 5 5 6 6 6 6 7 Water UtilityWater Towers3 3 3 3 3 3 3 3 3 3 Wells8 8 8 8 8 8 8 8 7 9 Miles of Water Main63 63 74 77 79 83 87 90 Hydrants717 722 794 846 871 923 975 1,014 Water Valves15,555 1,603 1,659 1,841 1,881 1,983 2,106 2,360 Sanitary Sewer UtilityTreatment Facilities2 2 2 2 2 2 2 2 2 2 Lift Stations9 9 9 9 9 10 10 10 10 10 Miles of Sanitary Sewer Lines69 - 74 76 79.5 81.8 86.1 96.9 Manholes1,257 1,257 1,366 1,480 1,524 1,594 1,730 1,774 Miles of Sanitary Forcemain20 20 20 20 20 21 21 21 Sources: The data for this table has been provided by each respective City department.Note: The City made significant changes to the statistics included in this table for 2015. Not all historical data was able to be compiled, and this table will be updated on a go-forward basis.147
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