ITEM 5.1 CAFRIV
OtsTeF o
MINNESOTA V
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT:
REQUESTOR:
MEETING DATE:
Administration
Dan Jordet, ASD
July 14, 2014
PRESENTER(s):
REVIEWED BY:
ITEM #:
Dan Jordet, ASD
Lori Johnson, CA
5.1
AGENDA ITEM DETAILS
RECOMMENDATION:
Following presentations by KDV, the City's auditors and the Administrative Services Director it is
recommended that the City Council consider a resolution adopting the Comprehensive Annual Financial
Report for the fiscal year ended December 31, 2103.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
No
IS A PUBLIC HEARING REQUIRED?
No
BACKGROUND/JUSTIFICATION:
The Comprehensive Annual Financial Report (CAFR) for the City of Otsego for the fiscal year ended
December 31, 2013 is finished. On Monday evening, July 14, 2014, Andrew Grice and Nancy
Schulztenberg of KDV will be present to report on the results of the audit of those statements. For
2013, the City has received an unmodified opinion on the statements. This was formerly called an
unqualified opinion and is often referred to as a "clean" opinion. The Report on Compliance details the
three findings in the 2013 audit. Management has responded to each of these findings and will
implement procedures during 2014 to address these areas. Following their remarks, Administrative
Services Director Jordet will review the CAFR and highlight the information pertinent to understanding
the City's current financial condition. In addition, he will highlight portions of the CAFR that provide
information important for future budget and capital improvement planning.
The attached documents include the Comprehensive Annual Financial Statement for 2013 including the
audit opinion on the statements, the 2013 Auditor's Report on Compliance, the document which
provides the supplemental opinions on other legally required tests of the financial system of the City,
the 2013 Auditor's Communications Letter, a document which provides overview and summary of the
operating results of the 2013 fiscal year, and a resolution adopting the CARF for 2013.
SUPPORTING DOCUMENTS: X ATTACHED ❑ NONE
2013 CAFR
2013 Auditor's Reports on Compliance
2013 Auditor's Communications Letter
Resolution 2014 - 49
POSSIBLE MOTION
Please word motion as you would like it to appear in the minutes.
Move that Resolution 2014-49 adopting the Comprehensive Annual Financial Report for the fiscal year
ended December 31, 2013.
BUDGET INFORMATION
FUNDING: BUDGETED: ❑ YES
not applicable ❑ NO
X N/A
ACTION TAKEN
❑ APPROVED AS REQUESTED ❑ DENIED ❑ TABLED ❑ OTHER (List changes)
COMMENTS:
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2014-49
RESOLUTION ADOPTING THE COMPREHENSIVE ANNUAL FINANCIAL
STATEMENT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013
WHEREAS, the City annually prepares finacial statements detailing the balance sheets,
revenues and expenses, cash flows, debt positions, investment details and other statistical
information conveying the financial condition of the City to users of these financial statements;
and
WHEREAS, the compilation of these statements and their narrative components are referred to
as the Comprehensive Annual Financial Statement of the City; and
WHEREAS, the CAFR has been subjected to the review and audit standards mandated by
Minnesota State Statutes and Laws, GAAP, GAAFR standards the Certificate of Compliance
criteria of the Government Finance Officers Association (GFOA); and
WHEREAS, the audit of the CAFR has been completed by KDV Ltd., a certified public
accounting firm from Saint Cloud, Minnesota with expertise in municipal audits, and the City's
financial statement have been found to "present fairly, in all material respects, the respective
financial position of governmental activities, the business type -funds, each major fund and the
aggregate remaining fund information of the City of Otsego, Minnesota as of December 31,
2013" conveying an unmodified or clean opinion of the fair presentation of the CAFR; and
WHEREAS, said CAFR and the documents summarizing the audit oricess and finding have
been distributed to and discussed with the City Council of the City of Otsego on Monday, July
14, 2014.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
OTSEGO, WRIGHT COUNTY, MINNESOTA THAT:
the Comprehensive Annual Financial Report of the City of Otsego, Minnesota for the year ended
December 31, 2013 be and hereby is adopted as the official financial statement of the City of
Otsego for said fiscal year.
ADOPTED by the Otsego City Council this 14th day of July, 2014.
MOTION made by Council Member and SECONDED by Council Member
IN FAVOR:
OPPOSED:
ATTEST:
CITY OF OTSEGO
Jessica Stockamp, Mayor
Tami Loff, City Clerk
CITY OF
OtseEo
MINNESOTA
2013 Comprehensive
Annual Financial Report
July 14, 2014
General Fund 2013
Sources of revenue are heavily weighted toward
property taxes — 91.26%
Revenues $ 3,179,808 $ 31449,691.
Expenditures 3,654,491
Other Sources (Uses) 22,167
Net Operating Result $ 141,484
General Fund Balance end of 2013:
— $ 1,912,075 or 44.65% of 2014 budgeted
expenditures.
— Compares to $ 1,764,591 or 45.10% end of 2012
rrr rrr
rir rrr
Cash and Investments
Cash and Investments at 12/31/2013
Cash Investments due Investments due Investments due
within 12 months within 36 montlis beyond 36 months
Market Value of Investments
• City has carried investments at purchase price
rather than face value or market value.
GASB 31 practice says fair market value should
be stated; one of two ways
Resulted in net investment "loss" of $ 52, 569
Actual cash revenue received for investments
in 2013: $ 304,462
• Policy for conveyance of investmentv I
ue
information
Debt
Outstanding Debt.
— General Obligations
— Utility Revenues
— Issuance Premiums
— Compensated Absences
TOTAL
$17780000
27,660,000
1,112,099
81)226
$ 46,633,325
38. 13%
59.32%
• 2014 Payments (due within one year) total
$ 6,715,000 or 14,39% of outstanding debt.
2.38%
017%
Water and Sewer Utilities
Water: Operating revenues up $ 209,295; 21.21%
Additional from WAC $ 481,433
Net Revenue $506,546
Net Cash Flaw $9501929
Sewer: Operating revenues up $ 142,953; 13.70%
Additional from SAC $745,791
Net Operations ($208,385)
Net Cash flow $506,505
Water and Sewer Operations were brought in-house
in 2013
Considerations for 2014 and 2015
1. Repayment of GO Bonds requiring increased
property taxes.
2. Payment of Water and Sewer Revenue Bonds
relies onWAC/SAC receipts and cash flows,
3. Accurate and timely
must be a priority,
periodic financial reports
4. Developing models for monitoring and
maintaining cash flows for debt service and
capital projects.
5. Establishing in-house fixed asset tracking,
obtaining software, policy thresholds
Purchase Maturity 1/1112 Interest 12/31/13 12/31/13 12/31/13
Type Location Date Date Rate Bee Bal Purchases Earned Sales End Bal Face Value Market Value
GA
CD
CD
CD
CD
GA
CD
cd
CD
CD
CD
CD
CD
NS - Menominee School, Win
MBS -Sun National Bank, Vineland, NJ
MBS- American Federal Bank
MBS -Access National, Reston Virginia
NS-SunTmst Bank, Atlanta, Georgia
NS -Elkhart, Indiana Schools
NS -Stevens. Paint, Wisc.
ICD - American Express Centurion Bank
ICD- GE MoneyBank, Draper Utah
MBS - FirstBank, of Puerto Ric, Santrece, PR
MBS- State Bank oflndia, NY, NY
ICD -Bank ofAmenca
ICD - GE Capital Financial, Halladay, Utah
6/30/10
6/16111
12/18/09
6/21/11
6/29/09
617/11
6/13/11
10/6/11
10/6110
5/7/12
12/10/12
12/16/09
12/23/10
311/14 2.3500%
6/16/14 1.0500%
6/17/14 2.7000%
6/23/14 1.0000%
6/30/14 var
715/14 1.7000%
10/1/14 1.3500%
10/6/14 1.4000%
10/8/14 1.7000%
11/4/14 0.7000%
11/21/14 0.8000%
12/16/14 3.5000%
12/23/14 1.7000%
270,6.17.57
100,000.00
99,007.32
200,000.00
100,005 00
458,086.11
51,935.00
106,000.00
101,000.00
249,014.33
248,103.28
85,099.44
100,000.00
270,617.57
100,000.00
99,007.32
200,000.00
100,005.00.
458,086.11
51,935.00
106,000.00
101,000.00
249,014.33
248,103.28
85,099.44
100,000.00
245,000.00
100,000.00
99,000.00
200,000.00
100,000.00
400;000.00
50,000.00
106,000.00
101,000.00
249,000.00
248,000.00
85,000.00
100,000.00
246,680.70
100,415.00
100,022.67
200,424.00
99,705.00
409,928,00
50,727.50
106,826.58
102,032.01
249,958.65
248,649.76
65,099.44
101.,258.40
GA
GA
GA
CD
CD
GA
GA
CD
GA
GA
CD
CD
CD
CD
NS -ISD 270, Hopkins, MN
NS- ISD 284, Wavata, MN
NS- ISD 394, Montgomery
MBS -Safra National Bank
MBS -Portage Bank, Almond Wise.
NS -Newark Bonds
NS - Linn County, 1.-
MBS -World's Foremost Bank, Lincoln, NE
NIS ge E 6 0 p Fanw-a--
NS -Federal Fane Credit Banks
MBS -Georgia Bank &Trust
MBS- Keybunk National Assoc., Cleveland, Ohio
VAs
MBS -Bank of Holland, bII
1/15/09
5/28/09
3/17/10
2/121/12
6/23/11
3/24/08
12/23/10
7/7/10
5,1_8 ()
10/9/12
9/14/12
5/23/13
a-;= I ,
12/29/11
2/1/15
2/1/15
211/15
2/9/15
3/20/15
4/1/15
611/15
7/7/15
9,I,I1
10/9/15
11/12/15
11/23/15
+Qo13
12/29/15
4.5000%
3.1500%
3.0000%
0.8500%.
1.2500%
5.1250%
1.9000%
2.4000%
;.iS,i.��
0.4140%
0.5000%
0.4500%
1.1500%
364,298.90
375,890.94
185,831.95
248,069.30
100,010.27
106,803.85
200,007.00
100,000.00
500,007.00
249,006.82
K1.00 .00
249,000.00
(33,834.25) 350,000.00
248,003.06
249,000.00
364,298.90
375.890.94
185,831.95
248,06930
100,010.27
106,803.85
200,007.00
100,000.00
-
500,007.00
249,006.82
248;003,06
-
249,000.00
355,000.00
375,000.00
185,000:00
248,000.00
100,000.00
100,000.00
200,000.00
100,000.00
-
500,000.00
249,000.00
248,000.00
-
249,000.00
371,752.45
384,847.50
189,454.80
250,026.16
101,369.00
104,248.00
202,656.00
100,000.00
500,010.00
250,491.51
247,270.88
-
253,240.47
GA
CD
CD
CD
GA
CD
CD
CD
CD
Cd
CD
GA
GA
GA
CD
CD
CD
NS- Lake city ISD 813
MBS-. Goldman Sachs Bank USA
MBS- GE Capital Financial, Inc.
MBS- Republic Bank, Bountiful, Utah
NS- LaCrosse County, Wisconsin
ICD- GE Money Bank, Draper; Utah
MBS- Doral Bank, Cantano, PR
ICD- Sallie Mae Bank, Murray, Utah
MBS- JPMorgm Chase Bk, NA, Col., Ohio
MBS- CIT Bank Salt Lake City, Utah
MBS- ForhmeBank Arnold, MO.
MBS �-PAC
3489 FbPbk
MBS -Federal Farm Credit Banks
MBS- American Express Centurion, Midvale, Uta
MBS- Heritage Bank, Hopkmsville, Ky
MBS. -Barclays Bank Wilmington, DE
6/18/12
8124/11
9/23/11
9130/11
12/26/12
10/6110
8/9/12
10/15/12
5/23/13
6/29/12
3/20/13
602?=I3
4/?+> -'-1-2
6/13/12
12/1/11
3/9/12
12/21/11
2/1/16
8/24/16
9/23116
9/30/16
10/1/16
10/11/16
10/11/16
10/17/16
11/3116
11/2/16
11/21/16
-i P2246
-.T1
11/28/16
12/1/16
12/9/16
12/21116
1.1000%
1.8500%
2.0000%
1.7500%
2.2500%
1.2500%
13500%
V..
1.2000%
0.7000%
o893.0
0.66.402.;
0.8830%
2.0500%
2.0000%
108,850.81
248,000.00
125,000,00
115,000.00
88,398.88
100,000.00
148,000.00
100,000.00
47,089.62
i I, i 1
_
130;954:63
132,000.00
240,000.00
247000.00
248,067.95
200,000,00
(3,044.44) 800,000.00
(800.00) 200,000.00
108,850.81
248,000.00
125,000.00
115,000.00
88,398.88
100,000.00
148,000.00
100,00000
248,06795
47,089.62
200,000.00
-
-
130,954.63
132,00000
240,000.00
247,00000
100,000.00
248,000.00
125,000.00
115,000.00
75,000.00
100,000.00
148,000.00
100,000.00
248,000.00
47,000.00
200,000.00
-
-
11 Q000.00
132,000.00
240,000.00
247,000.00
103,743.00
252,431.76
127,515.00
117,873.85
84,061.50
103,596.40
149,073.00
100,691.90
243,528.56
47,493.97
196,520.00
123,965 60
135,090.12
244,382.40
251,693.00
GA
GA
GA
GA
CD
GA
CD
GA
CD
CD
CD
GA
CD
GA
GA
GA
NS - Scott County, MN
NS- St. James, MN bonds
NS- Glencoe Refimding Bonds
NS- City of North Mankato, MN
MBS- Discover Bank Greenwood, DeL
NS- St. Paul, MNRfdgTaxIncrement
MBS -Sawyer Savmgs Bank Saugerites, NY
NS -.Lim County; Iowa
ICD -Partners Bank Mission Viejo, CA
ICD- Sallie Mae Bank Murray, Utah
MBS- Citizens State Bank Clayton, WI
NS-FFC13
MBS- Banco Popular DE PR Hato Rey
. M.1.1114,,.,TNetes
NS ^'�%g:`,sei Pismo- Olne
NS - Elbow Lake, MN
12/14/10
12/3/09
6/12/12
12/30/10
3/1/12
7/6/10
3/2/12
12/23/10
6/23/11
10/15/12
2/22/13
12/4/12
12/20/12
7=2qF2
1-F
1/5/12
2/1/17
211/17
211/17
2/1/17
3/1/17
3/1/17
3/2117
6,1/17
6/30/17
10/17/17
10/23/17
11/20/17
11/21/17
TP124-7
4A 7
12/1/17
2.65`+`%
439 J%
1.4500%
3.2000%
1.4500%
3515(YTM)%
1.1500%
25000%
2.0500%
1.5000%
0.8000%
0.8500%
1.1000%
-i4lei0"-;
2.1000%
90,00700
130,036.78
100,051.31
55;148.78
100,000.00
111,258.51
140,000.00
200,007.00
100,000.00
100,000.00
300,106.17
248,142.01
-00 Pt - ?4
".-., 11 , 09"
100,030.33
120,000.00
(477.78) 200,000.00
(24,214.00) 150,000.00
90,007.00
130,036.78
100,05131
55.148.78
100,000.00
111,258.51
140,000.00
200,007.00
100,000.00
100,000.00
120,000.00
300,106.17
248,142.01
-
100,030.33
90,000.00
130000.00
100,000.00
55,000.00
100,000.00
100,000.00
140,000.00
200,000.00
100,000,00
100,000.00
120,000.00
300,000.00
248,000.00
-
100,000.00
92,416.50
138,225.10
98,660.00
57,127.40
101,809.00
100,562.00
138,847.80
203,612.00
102,158.00
99,785.50
118,731.60
294,186.00
247,940.48
100,750.00
GA
GA
CD
CD
NS- Pewaukee, Wise. Refunding bonds
NS - FHLBanks
MBS -Northern Bank &Trust, Woburn, MA
MBS -New ort Fed S&L, RI
6/25/10
2/8/13
12/26/12
12/5112
3/1/18
11/8/18
11/28/18
11/26/18
(3.27%YTM)
1,0490%
1.0500%
1.1500%
110,890.00
248,199.76
249,070.61
500,007:00
110,890.00
500,007.00
248,199.76
249,070.61
100,000.00
500,000.00
248,000.00
249,000.00
105,293.00
481,715.00
235,756.24
237,892.11
GA
CD
CD
GA
CD
CD
NS- Buffalo, MN school bonds
MBS- CIT Bank Salt Lake City, Utah
I)
NS- Kenosha County, WI bonds
ICD- State Bank of New Richland, MN
ICD- Steelorran Bank of Montana
12/22/11
5/23/12
i2l,�,)A:
9/30/10
12/24/12
12/21/12
2/1/19
5/23/19
6119'4
9/1/19
11/13/19
12/23/19
2.4260%
2.1000%
2400011
3.4000%
1.4000%
1.5000%
286,347.83
100,000.00
2Z(4.400,1)
175,007.00
103,043.46
100,000.00
250,000.00
286,347.83
100;000.00
-
175,007.00
103,043.46
100,000.00
250,000.00
100,000.00
-
175,000.00
103,000.00
100,000.00
267,300.00
99,255.00
-
178,871.00
98,928.41
94,554.20
CD
CD
GA
GA
GA
ICD - EagleB& T Little Rock, AR
MBS- Central Nast Bk Enid, OK
MBS -FHLNMtg
NOS -FHLBanks
NS -FNMA
6/21/13
5/23/13
5/15/13
12/4/12
1214112
712/20
11/13/20
11/13/20
11/20/20
11/27/20
1.7500%
15000%
1.6000%
1.7030%
15000%
200,637.78
300,09450
250,000.00:
249,081.86
250,111.11
250,000.00
249,081.86
250,111.11
200,637.78
300,094.50
250,000.00
249,000.00
250,000.00
200,000.00
300,000.00
242,625.25
229,610.37
233,907.50
190,784.00
272,93200
CD
GA
GA
ICD- Fust Business Bank Madison, WI
NS-FFI Banks
NS- Kaukauna, Win. Taxable Bonds
12/27/12
2/12/13
2/1/12
6/7/21
11/12/21
12/1/21
1.7500%
1.9960%
2.7500%
149,171.45
216;841.00
385,007.00
149,171.45
385,00700
216,841.00
149,000.00
385,000.00
200,000.00
131,376.28
359,813.30
204,606.00
GA
CD
GA
NS- City of Minneapolis GO Tax Increment
ICD- HSBC Bank USA, McLean Virginia
ICD -FLIM
10/31/11
2/5/13
6120/13
3/1/22
815/25
12/18/26
3.4290%
2.0000%
3.0000%
332,643.00
249,000.00
199,016.67
332,643.00
249,000.00
199,016.67
300,000.00
249,000.00
200,000.00
317,619.00
230,098.41
176,704.80
Total Investments 15,594,47866 2,898,294.65 (61,656.36) 4,508,000.00 13,923,116.95 13,667,000.00 13,623,212.79