SCC Item 1. 2024 City of Otsego Audit Presentation by BerganKDVCity of Otsego
Otsego, Minnesota
Nancy Schulzetenberg, CPA
SCC - Item 1.
The Audit
Opinion on the City’s Basic Financial Statements
◊Unmodified Opinion –Best opinion an auditor is able to offer
◊Provides assurance that the financial statements are fairly presented in all
material respects
Report on the results of an audit performed in accordance with
Government Auditing Standards
◊Lack of Segregation of Accounting Duties
◊No compliance findings
Components of the Audit
Report on the results of testing on Minnesota Legal Compliance
◊No findings
Communications Letter
◊Required communications
◊Financial analysis
◊Emerging issues
Components of the Audit (Continued)
Financial Communications
General Fund
General Fund Revenues
General Fund Revenues (Continued)
General Fund Revenues –Budget and Actual
General Fund Expenditures
General Fund Expenditures (Continued)
General Fund Expenditures
–Budget and Actual
Tax Capacity, Levy, and Rates
Water Fund
Sewer Fund
Storm Water Fund
Auditor
Nancy Schulzetenberg
AUDIT PARTNER
320-650-0219
NANCY.SCHULZETENBERG@CREATIVEPLANNING.COM
Thank You
Thank You
This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an
attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained
from sources deemed reliable but is not guaranteed.
Annual Comprehensive Financial Report
For the Year Ended December 31, 2024
Friedrich Park (Constructed in 2024)
City of Otsego, Minnesota
Annual Comprehensive Financial Report
For the Year Ended
December 31, 2024
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 33
Statement of Revenues, Expenditures and Changes in Fund Balances 34
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 City's Proportionate Share of Net Pension Liability 73
Schedule of City's Contributions 74
Notes to Required Supplementary Information 75
Combining and Individual Fund Statements and Schedules
Governmental Funds
Nonmajor Governmental Funds
Combining Balance Sheet 80
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 81
Nonmajor Special Revenue Funds
Combining Balance Sheet 84
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 86
Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
Tax Increment District No. 1 Fund 88
Tax Increment District No. 3 Fund 89
Tax Increment District No. 4 Fund 90
Nonmajor Capital Projects Funds
Combining Balance Sheet 92
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 94
Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
General Fund 96
CITY OF OTSEGO, MINNESOTA
TABLE OF CONTENTS
Debt Service Fund by Account
Combining Balance Sheet 102
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 103
Schedule of Revenues, Expenditures and Changes in Fund Balances: Budget-to-Actual
Series 2018A 104
Series 2020A 105
STATISTICAL SECTION (UNAUDITED)
Financial Trends
Net Position by Component 108
Changes in Net Position 110
Governmental Activities Tax Revenue by Source 117
Fund Balances of Governmental Funds 118
Changes in Fund Balances of Governmental Funds 120
Revenue Capacity
Estimated Actual Value, Taxable Market Value and Tax Capacity of Taxable Property 122
Tax Capacity of Real Estate & Personal Property 124
Property Tax Rates - Direct and Overlapping Governments 125
Principal Property Taxpayers 126
Property Tax Levies and Collections 127
Debt Capacity
Ratios of Outstanding Debt by Type 128
Ratios of General Bonded Debt Outstanding 129
Computation of Direct and Overlapping Governmental Activities Debt 131
Legal Debt Margin Information 132
Pledged Revenue Coverage 134
Demographic and Economic Information
Demographic and Economic Statistics 135
Principal Employment Sectors 136
Operating Information
Full-Time City Government Positions by Function 137
Operating Indicators by Function 138
Capital Asset Statistics by Function 140
This page has been left blank intentionally.
May 29, 2025
To the Honorable Mayor, Members of the City Council, and Residents of the City of Otsego.
Transmitted herewith is the Annual Comprehensive Financial Report of the City of Otsego for the fiscal year
ended December 31, 2024.
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 several 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 independent auditors.
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 in 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 serve its
residents more fully and to manage growth.
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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, 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 23,132, compared with 19,966 from the 2020 US
Census. Otsego is both the largest and 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 of Otsego Economic Development Authority (EDA) is a legally separate entity from the City. Although
legally separate, the EDA is reported as if it were part of the City as the EDA Board of Commissioners are made
up of the Mayor and four Councilmembers. The City has operational responsibility over the EDA, with this
criterion resulting in the EDA being reported as a blended component unit of the City, and separate financial
statements are not prepared for the EDA.
The City provides its residents and businesses with a full range of municipal services consisting of the
construction & maintenance of public streets, pedestrian trails, park and athletic facilities, recreational
opportunities, access to the Mississippi River, 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 50 hours of service 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.
Financial planning and control for the City of Otsego are based on the annual Operating Budget and the ten-
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 the 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 2024 and 2025.
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 need authorization of the City Administrator. The legal level of budgetary
control is at the fund level, so any appropriation transfers between funds need the approval of the City
Council.
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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 benefiting 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 239 new residential construction permits issued during 2024.
The average number of new residential construction permits over the past five years is 323. The latest
estimates developed by the City show total households at 8,226 or a growth of 53 percent over the past ten
years.
While most of the new housing in the community are single family homes, Phase 2 of the River’s Edge
Apartments complex initiated construction during 2024, adding 67 additional apartment units to the City.
The City is expecting this trend in residential housing growth to continue in accordance with the City’s
Comprehensive Plan with a population forecast of more than 30,000 by the year 2030. Housing developers
continually obtain new parcels of land, submit applications for development, complete the final plat approval
process through the Planning Commission and City Council, and ultimately develop new housing.
The taxable market value of property within the City for taxes payable 2025 is $3,555,416,695, the highest in
Wright County. Comparing this data point to 2015, there has been an increase in taxable market value of
property within the City of 237%, reflecting the growth in the community. The change from taxes payable 2024
was a decrease of 1.47%, the result of stabilization in assessed valuation of residential properties within the
City. According to data from the Wright County Assessor’s Office, there was approximately $105 million of
value added for new residential, commercial, and industrial development.
The City’s tax rate for payable 2025 is 24.352, an increase of 5.38% compared to the previous year. Taking a
longer-term view, the City’s tax rate in 2015 was 41.202, a decrease of 40.90%, illustrating the City’s ability to
manage growth of the property tax levy when compared to the growth in taxable market value.
As the City has continued to grow over the years, commercial development has paced well behind residential
and industrial sectors. In the past few years, the City is beginning to see a shift in this trend with numerous
commercial development projects. The City had a busy year in 2024, with completed projects including
Satellite Shelters, Coborn’s Grocery Store Expansion, Erberts and Gerbert’s, Starbuck’s Coffee, Kennedy Vision,
the Little Gym, Ace Hardware, and Pet Supplies Plus.
Additional commercial and industrial projects initiated in 2024 are nearing completion and should be open for
service during 2025 including R&L Carriers, Michels Office Expansion, O2B Kids Daycare, Everbrook Academy,
and Christian Brothers Automotive. The City approved additional projects in 2024 that have not broken ground
but are expected to begin construction in 2025 including Condo Suites of Otsego, Les Schwab Tire, and Costco.
3
The City has several development applications which have been submitted for staff reports and will proceed to
the Planning Commission and City Council, indicating that commercial and industrial growth will continue
throughout 2025 and beyond.
Minnesota Statutes and the City’s Business Subsidy Policy provide the authority for the City to enter into
certain agreements for economic development purposes. This policy outlines economic development goals
that provide public purpose including creation or retention of employment opportunities, transportation and
utility improvements, elimination of blight, growing taxable market value, and other development goals
established by the City Council. The City has two types of active economic development agreements including
tax abatements and tax increment financing.
The tax abatement program provided for investment in public infrastructure within the City that created an
opportunity for mixed use development that but for this public investment, would not have been feasible. This
program has provided for a 346% growth in taxable market value over the past five years for the development
property, has created employment opportunities, and commercial development providing goods and services
for the community.
The tax increment financing program provided for investment in public and private infrastructure within the
City. This program has created affordable senior housing, industrial development providing employment
opportunities, and elimination of blight by removal of a private wastewater treatment facility and
redevelopment into multifamily housing, mini-storage, and future commercial development opportunities.
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
MAJOR INITIATIVES
With all 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 2024 or set as goals in 2025.
Positioning for Growth.
Continued Construction of the West Wastewater Facility Expansion Project
Completed Space Needs & Architectural Design for Fire & Emergency Services Facility
Land Acquisition for Future Water Treatment Facilities
Completed Facility Design for Public Works Cold Storage Facility
4
Empowering the Organization.
Ongoing Administrator & Department group discussions
Improved Internal Communications with Onboarding of Communications Specialist
Revised Employee Performance Assessment Tools and Procedures
Continued annual all-employee team building and training session
Engaging Stakeholders.
Formation of Otsego Business Alliance in conjunction with Chamber of Commerce
Prairie Park Advisory Committee formulated the Prairie Park Master Plan
Ongoing collaboration with School District to plan for school capacities
Obtained County, State, and Federal Grant Funding for City Projects
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 budgeted 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.
The 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.
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 Annual Comprehensive Financial
Report for the fiscal year ended December 31, 2023. This was the 12th consecutive year that the City has
achieved this prestigious award.
To be awarded a Certificate of Achievement, the City had to publish an easily readable and efficiently organized
annual comprehensive financial report that satisfied 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 2024 Annual
Comprehensive Financial Report continues to meet the Certificate of Achievement program requirements, and
it will be submitted to the GFOA to determine eligibility for another Certificate.
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ACKNOWLEDGEMENTS
The preparation of this report would not have been possible without the skill, effort, 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 is 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, 2024
Jeff Dahl Council Member December 31, 2024
Brittany Moores Council Member December 31, 2024
Tina Goede Council Member December 31, 2026
Ryan Dunlap Council Member December 31, 2026
ADMINISTRATION
Name Position
Audra Etzel City Clerk
Adam Flaherty City Administrator & Finance Director
Sabrina Hille Assistant City Administrator & Human Resources
Kevin Lamson Street Operations Manager
Nick Jacobs Parks & Recreation Director
Kurt Neidermeier Public Utilities Manager
David Kendall City Attorney
Daniel Licht City Planner
Ron Wagner City Engineer
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Cus
Titl
e of
this
Sm
art
CITY COUNCIL
ADVISORY
COMMISSIONS
Planning
Parks & Recreation
Public Safety
Heritage
Preservation
CITY ATTORNEY CITY
ADMINISTRATOR
CITY CLERK
Communications
Elections
Records Retention
FINANCE DIRECTOR
Accounting, Budget
& Reporting
Utility Billing
Information
Technology
ASSISTANT CITY
ADMINISTRATOR
Human Resources
Customer Service
Communications
EMERGENCY
SERVICES DIRECTOR
Emergency
Management
Fire Protection
PARKS &
RECREATION
DIRECTOR
Recreation
Programming
Parks Maintenance
Prairie Center
STREET
OPERATIONS
MANAGER
Streets
Maintenance
Fleet Maintenance
Storm Water Utility
UTILITY MANAGER
Water Utility
Sanitary Sewer
Utility
PROFESSIONAL
SERVICES
Planning & Zoning
Engineering
Building Safety
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Otsego
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2023
Executive Director/CEO
9
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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 Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund, and the aggregate remaining fund information of the City of Otsego,
Minnesota, as of and for the year ended December 31, 2024, and the related notes to financial
statements, which collectively comprise the City's basic financial statements as listed in the Table of
Contents.
In our opinion, the accompanying 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, 2024, and the respective changes in financial position and,
where applicable, cash flows thereof and the respective budgetary comparison for the General Fund
for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America (GAAS) and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of the City of Otsego
and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements
relating to our audit. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
The City of Otsego's management is responsible for the preparation and fair presentation of the
financial statements in accordance with accounting principles generally accepted in the United
States of America, and for the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City of
Otsego's ability to continue as a going concern for twelve months beyond the financial statement
date, including any currently known information that may raise substantial doubt shortly thereafter.
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Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and
Government Auditing Standards will always detect a material misstatement when it exists. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if there is a substantial likelihood
that, individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the City of Otsego's internal control. Accordingly, no such
opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of
the financial statements.
Conclude whether, in our judgment, there are conditions or events considered in the
aggregate, that raise substantial doubt about the City of Otsego's ability to continue as a
going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
Management's Discussion and Analysis, 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 is the responsibility of management and, 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.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Otsego's basic financial statements. The accompanying combining
and individual fund statements and schedules identified in the Table of Contents are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
Such information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements. The
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our
opinion, the accompanying combining and individual fund statements and schedules are fairly stated,
in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive Financial
Report. The other information comprises the introductory and statistical sections but does not
include the basic financial statements and our auditor's report thereon. Our opinions on the basic
financial statements do not cover the other information, and we do not express an opinion or any
form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other
information and consider whether a material inconsistency exists between the other information and
the basic financial statements, or the other information otherwise appears to be materially
misstated. If, based on the work performed, we conclude that an uncorrected material misstatement
of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report dated May 29,
2025, 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 29, 2025
13
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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, 2024. 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 $195,576,778 (net position). Of this amount, $66,800,863 (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 $30,087,479 (18.18%) from the previous year. The net position of the governmental
activities increased $8,861,595 (11.75%). 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 $21,225,884 (23.57%) 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 $51,400,599,
which is an increase of $20,700,587 (67.43%) from the previous year. Of the total fund balance, the unassigned portion is $3,880,588,
which is free from any internal or external constraints upon its use.
• The General fund has a fund balance of $5,537,452 at the close of the current fiscal year. During 2024, the fund balance increased
$555,937 (11.16%) from the previous year. The increase in fund balance was the result of revenues exceeding expenditures and a positive
from other financing sources including interfund transfers and sales of capital assets. There is $351,229 (6.34%) of fund balance that is
nonspendable, which is a combination of prepaid items and land held for resale. The remaining fund balance is either restricted,
$180,133 (3.25%), assigned, $363,807 (6.57%) or is unassigned, $4,642,283 (83.84%).
• The Economic Development Authority (EDA) of the City issued $16,900,000 of Lease Revenue Bonds to finance the construction of
the Fire & Emergency Services Facility. The City had additional draw requests in the amount of $8,782,377 for the 2023 General
Obligation Sewer Revenue Notes aligned with construction activity on the West Wastewater Treatment Facility Expansion. The City's
total outstanding bonded debt increased by $21,419,018 (43.86%) during the year.
14
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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.
15
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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 20 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 Pavement Management fund, and the Fire & Emergency Services Facility 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, Tax Increment District No. 1, Tax Increment
District No. 3, and Tax Increment District No. 4 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 72 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 and related notes can be found on
pages 73 through 78 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 80 through 105 of this report.
16
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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 $195,576,778 at the close of
the most recent fiscal year.
The largest portion of the City's net position ($118,517,911 or 60.60%) reflects its investment in capital assets, which includes: land,
infrastructure, buildings, and machinery & equipment, less any related debt used to acquire those assets that is still outstanding.
The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to
repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
2024 2023 2024 2023 2024 2023
Current Assets 58,517,167$ 40,027,059$ 46,682,395$ 40,231,550$ 105,199,562$ 80,258,609$
Capital Assets 53,383,378 47,738,125 120,748,653 100,194,097 174,132,031 147,932,222
Total Assets 111,900,545 87,765,184 167,431,048 140,425,647 279,331,593 228,190,831
Deferred Outflows of Resources 420,433 365,540 154,624 123,770 575,057 489,310
Long-term Liabilities 21,283,087 4,125,336 47,476,921 43,370,123 68,760,008 47,495,459
Other Liabilities 6,030,883 7,078,343 7,491,258 6,534,668 13,522,141 13,613,011
Total Liabilities 27,313,970 11,203,679 54,968,179 49,904,791 82,282,149 61,108,470
Deferred Inflows of Resources 715,191 1,496,823 1,332,532 585,549 2,047,723 2,082,372
Net Investment in Capital Assets 51,935,165 44,222,133 66,582,746 50,937,723 118,517,911 95,159,856
Restricted 10,258,004 9,937,633 - - 10,258,004 9,937,633
Unrestricted 22,098,648 21,270,456 44,702,215 39,121,354 66,800,863 60,391,810
Total Net Position 84,291,817$ 75,430,222$ 111,284,961$ 90,059,077$ 195,576,778$ 165,489,299$
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 (5.24%) represents resources that are subject to external restrictions on how they may be used.
The unrestricted portion (34.16%) may be used to meet the City's ongoing obligations to citizens and creditors.
The governmental activities experienced increases in both current and capital assets. The increase in current assets is primarily due to unspent
bond proceeds as cash with fiscal agent. The increase in capital assets can be illustrated with street renewal projects, park improvements,
vehicles and equipment, facility planning, and developer infrastructure contributions. The increase in long-term liabilities is related to the EDA
issuance of Lease Revenue Bonds for construction of the Fire & Emergency Services Facility. The decrease in other liabilities is contributed
to the decrease in Development & Builder Fund deposits payable.
The current assets of the business-type activities increase is attributed to additional cash and investment balances through the continued
development activities generating availability and connection fees for the utility systems. Within current assets there was a decrease in amounts
due from other governments, representing receivables for draw requests on the West Wastewater Facility Expansion project. The capital asset
increases were attributable to ongoing investment in the utility systems infrastructure and the construction of projects such as the West
Wastewater Treatment Facility, Well No. 11, and Water Treatment Improvements at Wellhouse No. 4. The long-term liabilities increased
with continued draw requests and respective note issuance for financing of the West Wastewater Treatment Facility.
CITY OF OTSEGO - SUMMARY OF NET POSITION
Governmental Activities Business-type Activities Total
17
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
2024 2023 2024 2023 2024 2023
Program Revenues
Charges for Services 2,817,638$ 2,237,454$ 7,722,174$ 7,952,180$ 10,539,812$ 10,189,634$
Operating Grants and Contributions 540,778 924,558 - - 540,778 924,558
Capital Grants and Contributions 6,408,502 3,133,926 19,225,556 6,264,410 25,634,058 9,398,336
General Revenues
Property Taxes 9,022,265 9,177,125 - 38,000 9,022,265 9,215,125
Tax Increment 497,951 491,535 - - 497,951 491,535
Franchise Taxes 1,043,896 1,026,846 - - 1,043,896 1,026,846
Grants and Contributions not
Restricted to Specific Programs 162,084 111,798 - - 162,084 111,798
Unrestricted Investment Earnings 1,653,036 1,242,417 1,871,352 2,704,796 3,524,388 3,947,213
Other General Revenues 6,775 822 12,000 537 18,775 1,359
Total Revenues 22,152,925 18,346,481 28,831,082 16,959,923 50,984,007 35,306,404
Expenses
General Government 2,156,382 1,838,849 - - 2,156,382 1,838,849
Public Safety 4,064,326 3,378,313 - - 4,064,326 3,378,313
Public Works 4,394,198 4,761,125 - - 4,394,198 4,761,125
Culture and Recreation 1,790,561 1,541,099 - - 1,790,561 1,541,099
Economic Development 591,967 429,054 - - 591,967 429,054
Interest on Long-term Debt 429,496 67,854 - - 429,496 67,854
Water Utility - - 2,432,113 2,434,158 2,432,113 2,434,158
Sanitary Sewer Utility - - 4,701,984 4,590,454 4,701,984 4,590,454
Storm Water Utility - - 335,501 224,368 335,501 224,368
Total Expenses 13,426,930 12,016,294 7,469,598 7,248,980 20,896,528 19,265,274
Increase Before Transfers 8,725,995 6,330,187 21,361,484 9,710,943 30,087,479 16,041,130
Transfers 427,000 322,750 (427,000) (322,750) - -
Transfers - Capital Assets (291,400) (336,480) 291,400 336,480 - -
Change in Net Position 8,861,595 6,316,457 21,225,884 9,724,673 30,087,479 16,041,130
Net Position - January 1 75,430,222 69,113,765 90,059,077 80,334,404 165,489,299 149,448,169
Net Position - December 31 84,291,817$ 75,430,222$ 111,284,961$ 90,059,077$ 195,576,778$ 165,489,299$
Governmental Activities Business-type Activities Total
CITY OF OTSEGO - CHANGES IN NET POSITION
18
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
Governmental Activities
Governmental activities resulted in an increase of the City's net position by $8,861,595. Key elements of this change is as follows:
• Revenues increased $3,806,444 (20.75%) from the previous year. Charges for services, notably in public safety increased with the issuance
of more building permits. Capital grants, specifically in public works increased with increased municipal state-aid funding for streets, a
grant for construction of Otsego Creek improvements, and continued growth in developer installed infrastructure. Unrestricted investment
earnings also showed an increase from the prior year related to additional cash and investment balances earning interest, and market
conditions bearing higher interest rates.
• Expenses increased $1,410,636 (11.74%) compared to the previous year, with all functions having increases with the exception of public
works. The increase in interest on long-term debt was attributed to issuance costs for the EDA Lease Revenue Bonds when compared
to the prior year.
Below are specific graphs which provide comparisons of the governmental activities revenues and expenses:
12.72%; Charges for
Services
2.44%; Operating Grants28.93%; Capital Grants
40.73%; Property Taxes
2.25%; Tax Increment
4.71%; Franchise Taxes
0.73%; Unrestricted
Grants & Contributions
7.46%; Investment
Earnings
0.03%; Sales of Capital
Assets
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, 2024
Business-type Activities
Business-type activities resulted in an increase of net position by $21,225,884. Key elements of this change are as follows:
• Revenues increased $11,871,159 (70.00%) when compared to the previous year. The capital grants and contributions were the largest
driver, with increases in this revenue source from each of the three utility systems. The largest increase occurred in the sanitary sewer
function, with an $8 million state grant to offset costs of the West Wastewater Facility Expansion Project. Each of the three functions
had increases in this revenue source from continued development activities generating availability and connections and from developer
contributed assets. Investment earnings decreased primarily as bond proceeds earning interest have been consumed for project costs.
• Expenses increased $220,618 (3.04%) with increases amongst each utility function, except for the water utility, which showed a slight
decrease. Increases in expenditures were primarily attributable to increased personal services and depreciation expenses.
• Revenues exceeding expenses is attributable to the new development within the City. Charges for services are adequately covering
the expenses, with capital grants and contributions resulting in the increase and will provide for future debt service and capital projects.
Below are specific graphs which provide comparisons of the business-type activities revenues and expenses:
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
Water Utility Sanitary Sewer Utility Storm Water Utility
Function Expenses vs. Program Revenues
Expense Program Revenue
Charges for Services
26.78%
Capital Grants
66.68%Sales of Capital Assets
0.04%
Investment Earnings
6.50%
Revenues by Source
20
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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 $51,400,599, which
is an increase of 20,700,587 (67.43%) from the previous year. The unassigned fund balance, which is not subject to internal or
external constraints upon its use, $3,880,588 (7.55% 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 $5,537,452, an
increase of $555,937 (11.16%). The increase in fund balance was the result of revenues exceeding expenditures by $118,937 and from other
financing sources in the amount of $437,000 from interfund transfers and sales of capital assets. Assets of the General fund increased by
$601,184, with cash and investments, interest and taxes receivable being the primary increases. Liabilities increased $51,202 with both
accounts and accrued salaries payable increasing from the prior year. As a meaure 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 $4,642,283,
represents 51,11% of the current year General fund expenditures. Total General fund balance represents 60.96% of those same expenditures.
The Debt Service fund has a total fund balance of $1,882,352 at the end of the year, an increase of $734,901 (64.05%) from the previous
year. The primary reason for the increase of fund balance was the issuance of bonds, resulting in bond proceeds of $814,909. During the year,
the fund had $460,000 of principal payments.
The Pavement Management fund has a fund balance of $6,140,126 at the end of the year, an increase of $447,962 (7.87%) from the
previous year. Expenditures for the year totaled $2,254,276 which were for the annual street renewal project and annual pavement
preservation projects including mill and overlay, crack filling, fog sealing, asphalt patching, paint striping, and micro-surfacing.
The Fire & Emergency Services fund has a fund balance of $17,810,141 at the end of year. The fund balance is classified as restricted, and
represents unspent bond proceeds for the Fire & Emergency Services Facility Project. Expenditures during the year were $379,222 and were
for issuance costs related to the bond issuance. A $2 million transfer into the fund was made from the Capital Improvements fund as a cash
contribution to the respective capital project that decreased the amount of bond issuance.
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 $111,284,961, an increase of $21,225,884 (23.57%). There are two
components to net position in the enterprise funds, unrestricted ($44,702,215 or 40.17%) and net investment in capital assets
($66,582,746 or 59.83%). As a measure of liquidity, the unrestricted net position amounts to 658.27% 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, 2024
Below is a graph with comparative amounts for each fund balance component for fiscal years 2022, 2023 and 2024:
The City's Unassigned fund balance is currently $3,880,588, and represents 7.55% of total governmental fund balance. The
City also has four other components of fund balance, including Nonspendable (0.68%), Restricted (53.34%), Committed (0.73%) and
Assigned (37.70%).
• 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, affordable housing programs, lawful gambling, public safety, and tax increments. This component of fund
balance has been on an increasing trend as the result of fees collected on new development for park dedication and from additional state
aid funding with use restrictions such as public safety and affordable housing. The increase in the current year is the result of issuance
of bonds, with unspent bond proceeds being restricted for use as outlined within the bond issuance documents.
• The committed fund balances are within the City's special revenue funds for Street Lighting and Revolving Loans. This fund balance
component has remained 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.
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
Nonspendable Restricted Committed Assigned Unassigned
Governmental Fund Balance Components
2022 2023 2024
22
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
General Fund Budgetary Highlights
During the year, there were no amendments to the General fund budget. The budgeted revenues, expenditures, and other financing sources
resulted in no change in fund balance. Actual results for the fiscal year were an increase of $555,937 (11.16%). The key elements of this
change are as follows:
• Actual revenues exceeded the budget by $208,579 (2.32%). The largest revenue variance was provided by intergovernmental sources,
which were under budget by $248,661. This variance was largely expected, with the approved budget allocating $285,686 of public safety
aid received in 2023, and classified as restricted fund balance. This budget allocation was spread out over four years to phase in the budget
impacts of increasing public safety contracts for law enforcement. The next most significant variance was from licenses and permits,
which were over budget by $211,426, driven by more permits being issued during the year than anticipated during the budget development.
Investment earnings were over budget by $167,431, as the result of market conditions for interest rates which provided and increase in
the fair market value of the City's investment portfolio compared with the prior year. Other notable variances were from property taxes,
which were the result of more delinquent tax collections during the year than anticipated with the budget, and from charges and services
which were over budget by $23,974, with general government and culture and recreation sources being over budget.
• Actual expenditures were less than budget by $337,358 (3.58%). The largest variance was within the public works function, which was
under budget by $157,871. Each department within this function were under budget, with streets maintenance being the largest variance,
the result of staffing vacancies during the year. The general government function was the next most significant variance, being $152,756
under budget. Staffing vacancies within the finance department were the primary factor to the variance, with multiple other departments
also being under budget. The public safety function was over budget by $13,885, a combination of court fine payments to Wright County
for criminal prosecution services and fire protection contract payments. The other function over budget was capital outlay for public works
which was the result of a trailer purchase, with the overage being offset by sales of capital assets for the olde equipment.
• Transfers in were as budgeted, and represent annual contributions from the Water and Sanitary Sewer utility funds that help
manage the property tax levy.
• Sales of capital assets were not budgeted for during 2024, with the activity as a result of disposition of a trailer for public works.
• Transfers out were not budgeted for during 2024, and there were no interfund transfers out during the year.
The ending unassigned fund balance of the General fund ($4,642,283) represents 46.70% of the adopted 2025 budget.
23
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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 $174,132,031 (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 $26,199,809 (17.71%) 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 2024 street renewal project was completed during the year. This project improved the condition of street infrastructure within the
Vasseur's Oak Grove Estates 3rd & 4th Additions, Hall's 1st, 2nd, and 3rd Additions.
• 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 continued construction of the West Wastewater Treatment Facility Expansion which will increase the treatment capacity of
the west sewer system. The project will also bring the treatment processes to the most current technologies available in order to
meet current and future regulatory requirements. An additional component of the project will be the construction of an Administration
building that will provide staff workspaces, vehicle storage, and customer service accessibility.
• The City initiated several drinking water system projects, that include Well No. 11, Water Treatment Improvements at Wellhouse 4 and
Wellhouse 3. These projects increase capacity, system redundancy, and quality for the drinking water system.
• The City completed a space needs analysis, architectural design, and public bidding process for the Fire & Emergency Services Facility,
with construction phase anticipated for the summer of 2025.
• The City completed construction of Friedrich Park, the newest addition to the City's neighborhood park system. Carrick's Landing
Improvements were initiated during the year to provide additional park and river access amenities to the Mississippi River. A master plan
was developed for Prairie Park, with phasing and implementation of the plan slated for consideration by the City Council in future years.
2024 2023 2024 2023 2024 2023
Land 4,278,161$ 4,278,161$ 1,047,903$ 759,721$ 5,326,064$ 5,037,882$
Construction in Progress 3,445,500 1,092,466 39,268,175 25,365,280 42,713,675 26,457,746
Buildings and Improvements 3,791,743 3,955,436 15,673,670 15,787,127 19,465,413 19,742,563
Land Improvements 3,647,757 3,945,895 197,635 146,334 3,845,392 4,092,229
Machinery and Equipment 1,901,900 2,043,789 1,483,944 1,399,036 3,385,844 3,442,825
Infrastructure 36,318,317 32,422,378 63,077,326 56,736,599 99,395,643 89,158,977
53,383,378$ 47,738,125$ 120,748,653$ 100,194,097$ 174,132,031$ 147,932,222$
Additional information on the City’s capital assets can be found in Note 3 (C) on pages 54 through 55 of this report.
Governmental Activities Business-type Activities Total
CITY OF OTSEGO - CAPITAL ASSETS
(net of depreciation)
24
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
Long-Term Debt: At the end of the current year, the City had outstanding long-term bonded debt of $70,225,627.
2024 2023 2024 2023 2024 2023
General Obligation Bonds 2,595,000$ 3,055,000$ -$ -$ 2,595,000$ 3,055,000$
Lease Revenue Bonds 16,900,000 - - - 16,900,000 -
Notes from Direct Borrowings - - 42,900,627 35,586,609 42,900,627 35,586,609
General Obligation Revenue Bonds - - 7,860,000 10,195,000 7,860,000 10,195,000
Unamortized Premiums 1,195,915 234,506 693,924 954,563 1,889,839 1,189,069
Compensated Absences 164,416 136,799 49,284 44,506 213,700 181,305
Total 20,855,331$ 3,426,305$ 51,503,835$ 46,780,678$ 72,359,166$ 50,206,983$
Revenue streams for the repayment of the outstanding debt liabilities include: lease revenues, 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.
The Economic Development Authority has issued lease revenue bonds to provide funding the for the construction of the Fire & Emergency
Services Facility. Debt service on this issue is provided through a lease agreement between the EDA and the City. The City can source the
lease payments to the EDA with any available resources, and expects that property taxes will be the primary source.
In November 2023, the City issued $34,045,359 of General Obligation PFA Revenue Note, Series 2023 for the purpose of financing the eligible
project costs of the Clean Water State Revolving Fund project to improve treatment and for expansion of the West Wastewater Treatment
Facility. The aggregate principal amount of the loan disbursed and outstanding will bear interest at the rate of 2.843 percent per annum accruing
from and after the date of the Note, which is November 9, 2023, through the date on which no principal of the loan remains unpaid and all
accrued interest and servicing fees have been paid.
Outstanding debt increased by 43.86% during the year, net of scheduled principal payments of $4,263,359 during the year.
The City long term bond rating of AA+ was affirmed during the year, with a stable outlook, and the EDA received a long term bond rating
of AA with a stable outlook, each 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 $108,250,495, with $18,162,678 in debt outstanding that is applicable to the limit.
Additional information on the City’s long-term debt can be found in Note 3 (F) on pages 58 through 61 of this report.
CITY OF OTSEGO - OUTSTANDING DEBT
Governmental Activities Business-type Activities Total
25
CITY OF OTSEGO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2024
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 2025 operating budgets and capital improvement plans.
• The Taxable Market Value of real estate and personal property within the City decreased 1.47% for taxes payable 2025. This was
the result of residential property values decreasing by 4.85% from stabilization in the existing home sales market. The dollar value of new
construction in the City increased by $105,297,700, providing an offset to the valuation changes for existing properties.
• New construction in the residential sector continues within the City. During 2024, the City issued 239 building permits for new
residential construction, which brings the five year average to 323. The City also continues to see builders final platting new developments
for future years construction.
• Development of commercial and industrial properties was strong during 2024 with multiple completed development projects. The
City has approved several additional commercial and industrial developments that have will intiate construction in 2025.
• The City continued construction of 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 continue through the spring of 2025.
• The City has continued planning efforts for development of the Fire & Emergency Services Department that is expected to initiate
operations in January 2027. The City has entered contracts for the purchase of four apparatus that will be used in the operations of the
department and have significant build lead times. The City has completed a Facility Space Needs Analysis and architectural design
phases for the Fire & Emergency Services Building. Groundbreaking for construction of this facility is anticipated in the summer of 2025.
• The City continues to expand upon and make improvements to the Capital Improvement Plan (CIP). The adopted CIP for 2025
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, 2024
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and Investments 36,264,291$ 40,165,866$ 76,430,157$
Cash with Fiscal Agent 19,524,792 - 19,524,792
Receivables
Interest 310,311 - 310,311
Accounts 270,103 943,091 1,213,194
Taxes 169,696 - 169,696
Special Assessments 1,395,470 1,446,428 2,841,898
Leases - 964,761 964,761
Due from Other Governments 231,275 3,053,699 3,284,974
Land Held for Resale 202,200 - 202,200
Prepaid Items 149,029 108,550 257,579
Capital Assets
Nondepreciable 7,723,661 40,316,078 48,039,739
Depreciable, Net of Accumulated Depreciation 45,659,717 80,432,575 126,092,292
Total Assets 111,900,545 167,431,048 279,331,593
DEFERRED OUTFLOWS OF RESOURCES
General Employees Retirement Plan Pension Resources 420,433 154,624 575,057
Total Deferred Outflows of Resources 420,433 154,624 575,057
LIABILITIES
Accounts Payable 666,662 2,670,040 3,336,702
Deposits Payable 2,959,972 - 2,959,972
Due to Other Governments 7,997 23,623 31,620
Accrued Salaries Payable 82,563 30,331 112,894
Accrued Interest Payable 37,565 394,407 431,972
Unearned Revenue 1,763,241 - 1,763,241
Compensated Absences Payable
Due Within One Year 32,883 9,857 42,740
Due in More than One Year 131,533 39,427 170,960
Bonds Payable
Due Within One Year 480,000 2,210,000 2,690,000
Due in More than One Year 20,210,915 6,343,924 26,554,839
Notes from Direct Borrowings
Due Within One Year - 2,153,000 2,153,000
Due in More than One Year - 40,747,627 40,747,627
General Employees Retirement Plan Net Pension Payable
Due in More than One Year 940,639 345,943 1,286,582
Total Liabilities 27,313,970 54,968,179 82,282,149
DEFERRED INFLOWS OF RESOURCES
Grants for Subsequent Years 144,169 - 144,169
General Employees Retirement Plan Pension Resources 571,022 210,007 781,029
Antenna Rental Leases - 964,761 964,761
Deferred Gain on Refunding - 157,764 157,764
Total Deferred Inflows of Resources 715,191 1,332,532 2,047,723
NET POSITION
Net Investment in Capital Assets 51,935,165 66,582,746 118,517,911
Restricted
Debt Service 2,528,237 - 2,528,237
Lawful Gambling Programs 196,725 - 196,725
Affordable Housing 105,514 - 105,514
Tax Increment Financing 371,954 - 371,954
Park Development 6,409,647 - 6,409,647
Public Safety 645,927 - 645,927
Unrestricted 22,098,648 44,702,215 66,800,863
Total Net Position 84,291,817$ 111,284,961$ 195,576,778$
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, 2024
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 2,156,382$ 718,151$ 20,018$ -$ (1,418,213)$ -$ (1,418,213)$
Public Safety 4,064,326 1,909,448 111,191 216,188 (1,827,499) - (1,827,499)
Public Works 4,394,198 87,448 344,312 5,234,762 1,272,324 - 1,272,324
Culture and Recreation 1,790,561 102,591 12,500 957,552 (717,918) - (717,918)
Economic Development 591,967 - 52,757 - (539,210) - (539,210)
Interest on Long-Term Debt 429,496 - - - (429,496) - (429,496)
Total Government Activities 13,426,930 2,817,638 540,778 6,408,502 (3,660,012) - (3,660,012)
Business-Type Activities
Water Utility 2,432,113 3,083,184 - 3,689,928 - 4,340,999 4,340,999
Sanitary Sewer Utility 4,701,984 4,480,718 - 13,992,794 - 13,771,528 13,771,528
Storm Water Utility 335,501 158,272 - 1,542,834 - 1,365,605 1,365,605
Total Business-Type Activities 7,469,598 7,722,174 - 19,225,556 - 19,478,132 19,478,132
Total 20,896,528$ 10,539,812$ 540,778$ 25,634,058$ (3,660,012) 19,478,132 15,818,120
General Revenues
Property Taxes 9,022,265 - 9,022,265
Tax Increments 497,951 - 497,951
Franchise Taxes 1,043,896 - 1,043,896
Grants and Contributions Not
Restricted to Specific Programs 162,084 - 162,084
Unrestricted Investment Earnings 1,653,036 1,871,352 3,524,388
Gain on Disposal of Capital Assets 6,775 12,000 18,775
Transfers 427,000 (427,000) -
Transfers - Capital Assets (291,400) 291,400 -
Total General Revenues and Transfers 12,521,607 1,747,752 14,269,359
Change in Net Position 8,861,595 21,225,884 30,087,479
Net Position - January 1 75,430,222 90,059,077 165,489,299
Net Position - December 31 84,291,817$ 111,284,961$ 195,576,778$
The notes to the financial statements are an integral part of this statement.
29
CITY OF OTSEGO, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2024
Debt
General Service
ASSETS
Cash and Investments 4,991,574$ 1,066,855$
Cash with Fiscal Agent - 814,909
Receivables
Interest 310,311 -
Accounts 3,000 -
Taxes
Current 71,652 -
Delinquent 98,033 -
Special Assessments
Current - 946
Deferred 3,200 682,789
Delinquent 2,733 661
Due from Other Governments 3,787 -
Due from Other Funds - -
Land Held for Resale 202,200 -
Prepaid Items 149,029 -
Total Assets 5,835,519 2,566,160
LIABILITIES
Accounts Payable 103,541 358
Accrued Salaries Payable 82,563 -
Deposits Payable - -
Due to Other Governments 7,997 -
Due to Other Funds - -
Unearned Revenue - -
Total Liabilities 194,101 358
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Property Taxes 98,033 -
Unavailable Revenue - Special Assessments 5,933 683,450
Grants for Subsequent Years - -
Total Deferred Inflows of Resources 103,966 683,450
FUND BALANCES
Nonspendable 351,229 -
Restricted 180,133 1,882,352
Committed - -
Assigned 363,807 -
Unassigned 4,642,283 -
Total Fund Balances 5,537,452 1,882,352
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 5,835,519$ 2,566,160$
The notes to the financial statements are an integral part of this statement.
30
Fire Other
Pavement & Emergency Nonmajor Total
Management Services Facility Governmental Governmental
5,944,044$ -$ 24,261,818$ 36,264,291$
- 17,810,141 899,742 19,524,792
- - - 310,311
253,466 - 13,637 270,103
- - 11 71,663
- - - 98,033
593 - - 1,539
469,745 - 232,414 1,388,148
1,841 - 548 5,783
17,488 - 210,000 231,275
- - 617,526 617,526
- - - 202,200
- - - 149,029
6,687,177 17,810,141 26,235,696 59,134,693
75,465 - 487,298 666,662
- - - 82,563
- - 2,959,972 2,959,972
- - - 7,997
- - 617,526 617,526
- - 1,763,241 1,763,241
75,465 - 5,828,037 6,097,961
- - - 98,033
471,586 - 232,962 1,393,931
- - 144,169 144,169
471,586 - 377,131 1,636,133
- - - 351,229
- 17,810,141 7,542,404 27,415,030
- - 377,086 377,086
6,140,126 - 12,872,733 19,376,666
- - (761,695) 3,880,588
6,140,126 17,810,141 20,030,528 51,400,599
6,687,177$ 17,810,141$ 26,235,696$ 59,134,693$
31
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32
CITY OF OTSEGO, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF NET POSITION
DECEMBER 31, 2024
Fund Balances - Governmental Funds 51,400,599$
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 77,341,765
Accumulated Depreciation (23,958,387)
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 (19,495,000)
Unamortized Premium on Bonds Payable (1,195,915)
Accrued Interest Payable (37,565)
Compensated Absences Payable (164,416)
General Employees Retirement Plan Net Pension Payable (940,639)
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 98,033
Special Assessments Receivable 1,393,931
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 420,433
GERF Pension Deferred Inflows of Resources (571,022)
Total Net Position - Governmental Activities 84,291,817$
The notes to the financial statements are an integral part of this statement.
33
CITY OF OTSEGO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2024
Debt
General Service
REVENUES
Property Taxes 6,373,290$ 299,144$
Tax Increments - -
Franchise Taxes 114,342 -
Licenses and Permits 1,868,466 -
Intergovernmental 213,323 -
Charges for Services 282,489 -
Special Assessments 5,733 180,602
Fines and Forfeitures 40,982 -
Investment Earnings (net) 274,351 -
Miscellaneous 29,055 -
Total Revenues 9,202,031 479,746
EXPENDITURES
Current
General Government 1,929,189 -
Public Safety 4,037,788 -
Public Works 1,867,967 -
Culture and Recreation 1,088,343 -
Economic Development 90,600 -
Capital Outlay
General Government 32,397 -
Public Safety 3,211 -
Public Works 23,868 -
Culture and Recreation 9,731 -
Debt Service
Principal - 460,000
Interest - 98,406
Fiscal Agent Fees - 1,348
Total Expenditures 9,083,094 559,754
Excess (Deficiency) of Revenues
Over (Under) Expenditures 118,937 (80,008)
OTHER FINANCING SOURCES (USES)
Transfers In 427,000 -
Issuance of Debt - 814,909
Premium on Issuance of Debt - -
Sales of Capital Assets 10,000 -
Transfers Out - -
Total Other Financing Sources (Uses)437,000 814,909
Net Change in Fund Balance 555,937 734,901
Fund Balance - January 1 (As Previously Reported)4,981,515 1,147,451
Change within Financial Reporting Entity (Major to Nonmajor)- -
Fund Balance - January 1 (As Restated)4,981,515 1,147,451
Fund Balance - December 31 5,537,452$ 1,882,352$
The notes to the financial statements are an integral part of this statement.
34
Fire Other
Pavement Capital & Emergency Nonmajor Total
Management Improvements Services Facility Governmental Governmental
1,000,000$ -$ -$ 1,353,617$ 9,026,051$
- - - 499,441 499,441
929,554 - - - 1,043,896
- - - - 1,868,466
344,312 - - 1,482,974 2,040,609
- - - 1,922,066 2,204,555
130,901 - - 33,104 350,340
- - - - 40,982
297,471 - - 1,081,214 1,653,036
- - - 140,087 169,142
2,702,238 - - 6,512,503 18,896,518
- - - - 1,929,189
- - - - 4,037,788
- - - - 1,867,967
- - - - 1,088,343
- - - 501,367 591,967
- - - 191,700 224,097
- - - 1,141,148 1,144,359
2,254,276 - - 931,366 3,209,510
- - - 1,501,793 1,511,524
- - - - 460,000
- - - - 98,406
- - 379,222 - 380,570
2,254,276 - 379,222 4,267,374 16,543,720
447,962 - (379,222) 2,245,129 2,352,798
- - 2,000,000 - 2,427,000
- - 15,185,349 899,742 16,900,000
- - 1,004,014 - 1,004,014
- - - 6,775 16,775
- - - (2,000,000) (2,000,000)
- - 18,189,363 (1,093,483) 18,347,789
447,962 - 17,810,141 1,151,646 20,700,587
5,692,164 7,558,150 - 11,320,732 30,700,012
- (7,558,150) - 7,558,150 -
5,692,164 - - 18,878,882 30,700,012
6,140,126$ -$ 17,810,141$ 20,030,528$ 51,400,599$
35
CITY OF OTSEGO, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2024
Total Net Change in Fund Balances - Governmental Funds 20,700,587$
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 4,842,880
Depreciation Expense (2,286,200)
Assets Contributed by Developers 3,389,973
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. (291,400)
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. (10,000)
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 460,000
Issuance of Debt (16,900,000)
Premium on Issuance of Debt (1,004,014)
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. 49,480
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 (3,786)
Tax Increments (1,490)
Special Assessments (135,065)
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 (27,618)
GERF Pension 78,248
Change in Net Position - Governmental Activities 8,861,595$
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, 2024
Variance with
Original Final Budget -
and Final Actual Over
Budget Amounts (Under)
REVENUES
Property Taxes 6,324,793$ 6,373,290$ 48,497$
Franchise Taxes 132,000 114,342 (17,658)
Licenses and Permits 1,657,040 1,868,466 211,426
Intergovernmental 461,984 213,323 (248,661)
Charges for Services 258,515 282,489 23,974
Special Assessments 3,800 5,733 1,933
Fines and Forfeitures 30,900 40,982 10,082
Investment Earnings (net) 106,920 274,351 167,431
Miscellaneous 17,500 29,055 11,555
Total Revenues 8,993,452 9,202,031 208,579
EXPENDITURES
Current
General Government 2,081,945 1,929,189 (152,756)
Public Safety 4,023,903 4,037,788 13,885
Public Works 2,025,838 1,867,967 (157,871)
Culture and Recreation 1,119,706 1,088,343 (31,363)
Economic Development 104,960 90,600 (14,360)
Capital Outlay
General Government 38,100 32,397 (5,703)
Public Safety 6,000 3,211 (2,789)
Public Works 10,000 23,868 13,868
Culture and Recreation 10,000 9,731 (269)
Total Expenditures 9,420,452 9,083,094 (337,358)
Excess (Deficiency) of Revenues
Over (Under) Expenditures (427,000) 118,937 545,937
OTHER FINANCING SOURCES
Transfers In 427,000 427,000 -
Sales of Capital Assets - 10,000 10,000
Total Other Financing Sources 427,000 437,000 10,000
Net Change in Fund Balance - 555,937 555,937
Fund Balance - January 1 4,981,515 4,981,515 -
Fund Balance - December 31 4,981,515$ 5,537,452$ 555,937$
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, 2024
Sanitary Storm
Water Sewer Water Total
Utility Utility Utility Enterprise
ASSETS
Current Assets
Cash and Cash Equivalents 10,718,874$ 28,553,558$ 893,434$ 40,165,866$
Receivables
Accounts 258,344 673,958 10,789 943,091
Special Assessments
Current - - 302 302
Delinquent 272 - 984 1,256
Due from Other Governments - 3,053,699 - 3,053,699
Prepaid Items 29,895 78,655 - 108,550
Total Current Assets 11,007,385 32,359,870 905,509 44,272,764
Noncurrent Assets
Receivables
Leases 964,761 - - 964,761
Special Assessments
Deferred 444,565 965,039 35,266 1,444,870
Capital Assets
Land 505,192 542,711 - 1,047,903
Buildings and Building Improvements 431,412 16,561,654 - 16,993,066
Land Improvements 212,810 - - 212,810
Machinery and Equipment 702,077 2,025,793 32,200 2,760,070
Infrastructure 38,283,472 42,221,496 9,752,572 90,257,540
Construction in Progress 2,186,387 36,672,192 409,596 39,268,175
Total Capital Assets 42,321,350 98,023,846 10,194,368 150,539,564
Less: Accumulated Depreciation (10,238,648) (18,422,360) (1,129,903) (29,790,911)
Net Capital Assets 32,082,702 79,601,486 9,064,465 120,748,653
Total Noncurrent Assets 33,492,028 80,566,525 9,099,731 123,158,284
Total Assets 44,499,413 112,926,395 10,005,240 167,431,048
DEFERRED OUTFLOWS OF RESOURCES
General Employees Retirement Plan Pension Resources 38,656 115,968 - 154,624
LIABILITIES
Current Liabilities
Accounts Payable 366,302 2,302,317 1,421 2,670,040
Due to Other Governments 23,623 - - 23,623
Accrued Salaries Payable 7,583 22,748 - 30,331
Accrued Interest Payable 37,347 357,060 - 394,407
Bonds Payable 962,000 1,248,000 - 2,210,000
Notes from Direct Borrowings - 2,153,000 - 2,153,000
Compensated Absences Payable 2,464 7,393 - 9,857
Total Current Liabilities 1,399,319 6,090,518 1,421 7,491,258
Noncurrent Liabilities
Bonds Payable (net)4,731,194 1,612,730 - 6,343,924
Notes from Direct Borrowings - 40,747,627 - 40,747,627
Compensated Absences Payable 9,857 29,570 - 39,427
General Employees Retirement Plan Net Pension Payable 86,486 259,457 - 345,943
Total Noncurrent Liabilities 4,827,537 42,649,384 - 47,476,921
Total Liabilities 6,226,856 48,739,902 1,421 54,968,179
DEFERRED INFLOWS OF RESOURCES
General Employees Retirement Plan Pension Resources 52,502 157,505 - 210,007
Antenna Rental Leases 964,761 - - 964,761
Deferred Gain on Refunding 56,795 100,969 - 157,764
Total Deferred Inflows of Resources 1,074,058 258,474 - 1,332,532
NET POSITION
Net Investment in Capital Assets 25,998,253 31,520,028 9,064,465 66,582,746
Unrestricted 11,238,902 32,523,959 939,354 44,702,215
Total Net Position 37,237,155$ 64,043,987$ 10,003,819$ 111,284,961$
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, 2024
Sanitary Storm
Water Sewer Water Total
Utility Utility Utility Enterprise
OPERATING REVENUES
Charges for Services 2,976,498$ 4,476,296$ 157,131$ 7,609,925$
OPERATING EXPENSES
Personal Services 304,884 914,748 14,974 1,234,606
Supplies 396,080 421,800 1,893 819,773
Insurance 26,149 77,671 - 103,820
Utilities 208,979 400,572 - 609,551
Services and Other Charges 462,355 607,961 74,359 1,144,675
Depreciation 993,164 1,640,956 244,275 2,878,395
Total Operating Expenses 2,391,611 4,063,708 335,501 6,790,820
Operating Income (Loss) 584,887 412,588 (178,370) 819,105
NONOPERATING REVENUES (EXPENSES)
Antenna Rental 97,389 - - 97,389
Investment Earnings (net) 511,500 1,318,608 41,244 1,871,352
Sales of Capital Assets 6,000 6,000 - 12,000
Miscellaneous Revenue 9,297 4,422 1,141 14,860
Interest and Fiscal Agent Fees (40,502) (638,276) - (678,778)
Total Nonoperating Revenues (Expenses) 583,684 690,754 42,385 1,316,823
Income (Loss) Before Capital Contributions and Transfers 1,168,571 1,103,342 (135,985) 2,135,928
Capital Contributions - Intergovernmental Grants - 8,000,000 - 8,000,000
Capital Contributions - Connection Fees 2,024,229 4,429,102 - 6,453,331
Capital Contributions - Developer Assets 1,665,699 1,563,692 1,542,834 4,772,225
Capital Contributions - Governmental Funds - - 291,400 291,400
Transfers Out (106,750) (320,250) - (427,000)
Change in Net Position 4,751,749 14,775,886 1,698,249 21,225,884
Net Position - January 1 32,485,406 49,268,101 8,305,570 90,059,077
Net Position - December 31 37,237,155$ 64,043,987$ 10,003,819$ 111,284,961$
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, 2024
Sanitary Storm
Water Sewer Water Total
Utility Utility Utility Enterprise
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 2,987,926$ 4,409,138$ 150,500$ 7,547,564$
Other Operating Receipts 106,686 4,422 1,141 112,249
Payments to Suppliers (1,143,506) (1,562,932) (75,334) (2,781,772)
Payments to Employees (299,712) (899,137) (14,974) (1,213,823)
Net Cash Flows Provided by Operating Activities 1,651,394 1,951,491 61,333 3,664,218
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers Out (106,750) (320,250) - (427,000)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Acquisition and Construction of Capital Assets (2,453,764) (15,645,527) - (18,099,291)
Principal Paid on Revenue Bonds (1,000,600) (1,334,400) - (2,335,000)
Interest Paid on Revenue Bonds (178,844) (172,689) - (351,533)
Note Proceeds from Direct Borrowings - 9,591,067 - 9,591,067
Principal Paid on Direct Borrowings - (1,468,359) - (1,468,359)
Interest Paid on Direct Borrowings - (467,722) - (467,722)
Intergovernmental Capital Grant - 8,000,000 - 8,000,000
Sales of Capital Assets 6,000 6,000 - 12,000
Connection Fees 2,097,820 4,675,585 - 6,773,405
Net Cash Flows Provided (Used) by Capital and Related Financing Activities (1,529,388) 3,183,955 - 1,654,567
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Investments 511,500 1,318,608 41,244 1,871,352
Net Increase in Cash and Cash Equivalents 526,756 6,133,804 102,577 6,763,137
Cash and Cash Equivalents - January 1 10,192,118 22,419,754 790,857 33,402,729
Cash and Cash Equivalents - December 31 10,718,874$ 28,553,558$ 893,434$ 40,165,866$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Operating Income (Loss) 584,887$ 412,588$ (178,370)$ 819,105$
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Flows Provided by Operating Activities:
Depreciation 993,164 1,640,956 244,275 2,878,395
GERF Pension Activity 1,313 4,036 - 5,349
Other Income Related to Operations 106,686 4,422 1,141 112,249
(Increase) Decrease in Assets & Deferred Outflows of Resources:
Accounts Receivable 55,305 (68,159) (3,073) (15,927)
Special Assessments (43,877) - (3,558) (47,435)
Due from Other Governments - 1,001 - 1,001
Prepaid Items (8,535) (11,677) - (20,212)
Increase (Decrease) in Liabilities & Deferred Inflows of Resources
Accounts Payable (33,606) (43,251) 918 (75,939)
Due to Other Governments (7,802) - - (7,802)
Accrued Salaries Payable 2,664 7,992 - 10,656
Compensated Absences Payable 1,195 3,583 - 4,778
Net Cash Flows Provided by Operating Activities 1,651,394$ 1,951,491$ 61,333$ 3,664,218$
NONCASH FINANCING ACTIVITIES
Amortization of Premium and Deferred Gains on Bonds Payable 132,272$ 207,248$ -$ 339,520$
Acquisition of Capital Assets on Account 334,460$ 2,219,132$ -$ 2,553,592$
Contribution of Capital Assets - Developer 1,665,699$ 1,563,692$ 1,542,834$ 4,772,225$
Contribution of Capital Assets - Governmental Funds -$ -$ 291,400$ 291,400$
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, 2024
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 City of Otsego EDA is a legal entity separate
from the City. Although legally separate, the City of Otsego 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 City of Otsego EDA. It is this criterion that results in the EDA being reported as a blended
component unit within the primary government. Separate financial statements are not prepared for the City of Otsego EDA.
41
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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, franchise 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, 2024
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.
Pavement Management Fund - 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.
Fire & Emergency Services Facility Fund - This fund was established to receipt the proceeds of debt issuance and
to account for the expenditure of funds for the construction of the Fire & Emergency Services Facility.
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.
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 between the City's utility functions and various other functions of the City.
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.
43
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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 or the National Credit Union
Administration.
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. Amounts invested in the 4M Plus must be deposited for a minimum
of 14 days. Withdrawals made prior to the 14-day requirement will be subject to a penalty equal to 7 days interest on the
amount withdrawn. Term Series investments are designed to be held to maturity. If an investment made in a Term Series is
withdrawn prior to the maturity date of that Series, seven days notice of redemption is required, and a penalty will likely be
assessed.
44
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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.
Leases
The City is a lessor for several noncancellable leases. The City recognizes a lease receivable and a deferred inflow of
resources in the government-wide and proprietary fund financial statements.
At the commencement of a lease, the City measures the lease receivable at the present value of payments expected to be
received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments
receive. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease
payments received at or before the lease commencement date. Subsquently, the deferred inflow of resources is recognized
as revenue over the life of the lease term in a systematic and rational manner.
Key estimates and judgements include how the City determines: 1) the discount rate, 2) the lease term, 3) lease receipts,
and 4) the amortization. The City determines the discount rate for leases based on the applicable State and Local Government
Securities (SLGS) rate. The lease term includes the noncancellable period of the lease. Lease receipts included in the
measurement of the lease receivable is composed of fixed payments from the lessee.
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.
45
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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, 2024 are planned to be eliminated in 2025. 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, 2024, management has reviewed the reported values of the assets.
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.
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
46
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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 assets
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.
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.
47
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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. SUBSCRIPTION BASED INFORMATION TECHNOLOGY ARRANGEMENTS
In May 2020, the Governmental Accounting Standards Board (GASB) issued Statement No. 96, Subscription Based Information
Technology Arrangements (SBITA). The primary objective of this Statement was to improve accounting and financial reporting
of SBITA's by providing uniform guidance that will result in greater consistency in practice. The City has no SBITA's that would
result in an intangible asset and corresponding subscription liability.
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 assets that applies to future
periods and so will not be recognized as an inflow of resources (revenue) until that time. The City has four 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. The third item presented by the City on the government-wide statement of net position and on the proprietary
funds statement of net position are deferred inflows of resources related to a deferred gain on a refunding bond issuance
which will be amortized over the remaining life of the debt issuance. The fourth item, Antenna Rental Leases, is reported in
both the government-wide and proprietary funds statements of net position.
48
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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.
49
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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 Series 2018A and Series 2020A Debt Service funds, Tax Increment District No. 1,
Tax Increment District No. 3, and Tax Increment District No. 4 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 the approval of the City Council. There were no transfers of budgeted appropriations or budget amendments during
the year.
NOTE 2 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. DEFICIT FUND EQUITY
Deficit fund equity exists at December 31, 2024 in the following fund:
Non-Major Governmental Funds:
Capital Project Funds
MSA Construction 761,695$
The deficit is being funded through internal borrowing. The MSA Construction fund deficit will be repaid with State-Aid
funding in 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, 2024
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 fair 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 $513,054, and a bank balance of $1,273,379.
Custodial credit risk for the City's deposits would arise in the event of a bank failure, where the City's deposits may not be
returned to it. As of year-end, the City's bank balance was not exposed to custodial credit risk because it was insured and fully
collateralized with securities held by the pledging financial institution's trust department or agent in the City's name.
As of December 31, 2024 the City had the following investments:
Fair Value < 1 1 - 3 3 - 5
Negotiable Certificates of Deposit 22,168,996$ 5,333,312$ 13,925,057$ 2,910,627$
U.S. Government Agency Securities 25,482,280 7,448,032 14,243,250 3,790,998
Municipal Bonds 11,481,055 1,615,112 8,312,492 1,553,451
External Investment Pool 16,697,669 16,697,669 - -
Brokered Money Market Accounts 86,503 86,503 - -
Total 75,916,503$ 31,180,628$ 36,480,799$ 8,255,076$
The external investment pool and brokered money market investments are valued at amortized cost. The City's investments in
Negotiable Certificates of Deposit, U.S. Government Agency Securities, and Municipal Bonds have recurring fair value
measurements using a matrix pricing model (level 2 input). The City's investments in U.S. Treasuries are valued using a quoted
market price (level 1 input).
Investment Maturities (In Years)
Investment Type
51
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
As of December 31, 2024, 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+ 4,174,731$ 5.50%
Federal Home Loan Bank (FHLB) Aaa AA+ 9,813,078 12.93%
Federal Home Loan Mortgage Corporation (FHLMC) Aaa AA+ 4,228,956 5.57%
Federal National Mortgage Association (FNMA) Aaa AA+ 2,877,642 3.79%
Treasury Note Aaa NR 4,387,873 5.78%
Total 25,482,280$ 33.57%
Municipal Bonds
Lake of the Woods School District, MN NR AAA 620,322 0.82%
City of Salem, OR Aa2 NR 500,150 0.66%
State of Mississippi Aa2 AA 1,426,980 1.88%
Shakopee School District, MN Aa1 NR 722,063 0.95%
City of New York, NY Aa2 AA 949,280 1.25%
State of California Aa2 AA-483,660 0.64%
Canutillo School District, TX Aaa NR 525,370 0.69%
Town of Wilmington, MA NR AAA 463,655 0.61%
Multnomah County School District, TX Aa2 AA 694,447 0.91%
Sunnyvale School District, CA NR AAA 348,465 0.46%
City of Richmond, VA Aa1 AA+680,360 0.90%
City of Medford, OR NR AA- 1,120,436 1.48%
Glendale School District, CA Aa1 NR 654,713 0.86%
San Jose Evergreen College, CA Aaa AA+423,450 0.56%
Yosemite Communitey College, CA Aa2 NR 462,415 0.61%
State of Connecticut Aa3 AA-467,854 0.62%
Carter County, TN Aa3 NR 430,885 0.57%
Nashville Davidson County, TN Aa2 AA+506,550 0.67%
Total 11,481,055$ 15.12%
The following is a summary of cash deposits and investments as of December 31, 2024 and presented in the basic financial
statements in the Statement of Net Position:
Deposits 513,054$
Investments 75,916,503
Petty Cash and Change Funds 600
Total 76,430,157$
The following is a summary of total deposits and investments as of December 31, 2024 and presented in the basic financial
statements in the Statement of Net Position:
Cash and Investments 76,430,157$
Cash with Fiscal Agent 19,524,792
Total 95,954,949$
Investment Type
52
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
Interest Rate Risk – This is the risk that the fair 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),
and Federal Home Loan Mortgage Corporation (FHLMC). These investments are 5.50 percent, 12.93 percent, and 5.57 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.
B. LEASE RECEIVABLE
The City has implemented GASB 87 effective December 31, 2022 and has recognized a Lease Receivable and respective
Deferred Inflow of Resources in the amount of $964,761. Leases included in the lease receivable are the leased space above
Water Towers No. 1 and No. 3 to several communication companies. Lease terms are as follows:
2024 Lease 2024 Lease
Revenue Receivable
T-Mobile 36,182$ 849,499$ Four Terms of 5-Years
Nextera Wireless 19,359 51,185 Three Terms of 5-Years
Verizon Wireless 41,848 64,077 n/a
Adjustment Factor
Annual Lease
Options
Renewal
Lessee
4%
5%
4%
53
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2024 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental Activities:
Capital Assets, not Being Depreciated:
Land 4,278,161$ -$ -$ 4,278,161$
Construction in Progress 1,092,466 2,353,034 - 3,445,500
Total Capital Assets, not Being Depreciated 5,370,627 2,353,034 - 7,723,661
Capital Assets, Being Depreciated:
Buildings and Building Improvements 6,680,801 - - 6,680,801
Land Improvements 7,826,703 - - 7,826,703
Machinery and Equipment 5,230,489 272,438 (59,678) 5,443,249
Infrastructure 44,351,370 5,315,981 - 49,667,351
Total Capital Assets, Being Depreciated 64,089,363 5,588,419 (59,678) 69,618,104
Less Accumulated Depreciation for:
Buildings and Building Improvements 2,725,365 163,693 - 2,889,058
Land Improvements 3,880,808 298,138 - 4,178,946
Machinery and Equipment 3,186,700 404,327 (49,678) 3,541,349
Infrastructure 11,928,992 1,420,042 - 13,349,034
Total Accumulated Depreciation 21,721,865 2,286,200 (49,678) 23,958,387
Total Capital Assets Being Depreciated - Net 42,367,498 3,302,219 (10,000) 45,659,717
Governmental Activities Capital Assets - Net 47,738,125$ 5,655,253$ (10,000)$ 53,383,378$
Depreciation expense was charged to the functions of the City as follows:
Governmental Activities:
General Government 30,409$
Public Safety 24,276
Public Works 1,761,546
Culture and Recreation 469,969
Total Depreciation Expense - Governmental Activities 2,286,200$
54
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
Beginning Ending
Balance Increases Decreases Balance
Business-type Activities:
Capital Assets, not Being Depreciated:
Land 759,721$ 288,182$ -$ 1,047,903$
Construction in progress 25,365,280 18,000,241 (4,097,346) 39,268,175
Total Capital Assets, not Being Depreciated 26,125,001 18,288,423 (4,097,346) 40,316,078
Capital Assets, Being Depreciated:
Buildings and Building Improvements 16,670,750 322,316 - 16,993,066
Land Improvements 151,380 61,430 - 212,810
Machinery and Equipment 2,449,196 310,874 - 2,760,070
Infrastructure 81,710,286 8,547,254 - 90,257,540
Total Capital Assets, Being Depreciated 100,981,612 9,241,874 - 110,223,486
Less Accumulated Depreciation for:
Buildings and Building Improvements 880,253 439,143 - 1,319,396
Land Improvements 5,046 10,129 - 15,175
Machinery and Equipment 1,050,160 225,966 - 1,276,126
Infrastructure 24,977,057 2,203,157 - 27,180,214
Total Accumulated Depreciation 26,912,516 2,878,395 - 29,790,911
Total Capital Assets Being Depreciated - Net 74,069,096 6,363,479 - 80,432,575
Business-type Activities Capital Assets - Net 100,194,097$ 24,651,902$ (4,097,346)$ 120,748,653$
Depreciation expense was charged to the functions of the City as follows:
Business-type Activities:
Water Utility 993,164$
Sanitary Sewer Utility 1,640,956
Storm Water Utility 244,275
Total Depreciation Expense - Business-type Activities 2,878,395$
55
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
D. CONSTRUCTION COMMITMENTS
At December 31, 2024 the City had construction project contracts in progress. The commitments related to remaining contract
balances are summarized as follows:
Contract Remaining
Amount Commitment
Major Governmental Funds:
Fire & Emergency Services Facility
Fire & Emergency Services Building 14,018,369$ 14,018,369$
Nonmajor Governmental Funds:
Park Development
Carrick's Landing Improvements 466,802 41,274
Watershed Districts
Otsego Creek Rehabilitation 332,370 77,423
Water Utility
Well No. 11 254,041 47,227
Wellhouse No. 4 Water Treatment 6,887,419 6,351,342
Sanitary Sewer Utility
West Wastewater Treatment Facility Expansion 35,066,973 2,920,054
Total 57,025,974$ 23,455,689$
E. INTERFUND BALANCES AND TRANSFERS
At December 31, 2024, 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 617,526$ -$
Nonmajor Governmental Funds:
MSA Construction - 617,526
Total 617,526$ 617,526$
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, 2024
Transfers between funds made during the year ended December 31, 2024 were as follows:
Transfer In Transfer Out
Major Governmental Funds:
General 427,000$ -$
Fire & Emergency Services Facility 2,000,000 -
Nonmajor Governmental Funds:
Capital Improvements - 2,000,000
Total Governmental Funds 2,427,000 2,000,000
Major Proprietary Funds:
Water Utility - 106,750
Sanitary Sewer Utility - 320,250
Total Proprietary Funds - 427,000
Total All Funds 2,427,000$ 2,427,000$
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 2024, the following
transfers were made between funds:
• The Capital Improvements fund transferred $2,000,000 to the Fire & Emergency Services Facility fund as a
contribution to reduce the amount of borrowing needed for the construction of the facility project.
• The Water Utility and Sanitary Sewer Utility funds transferred $106,750 and $320,250 respectively to the General
fund as an annual contribution to help manage the property tax levy.
Fund
57
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
F. LONG-TERM DEBT
Governmental Activities
The City has issued general obligation bonds to provide funding for the construction of governmental activities infrastructure
for street improvements. General obligation bonds have also been issued to refinance previously issued bonds to achieve
interest rate savings. These bond issues are backed by the full faith and credit of the City. Debt service on these issues
is provided through the collection of property taxes and special assessments. At the end of the current year, there are
assets accumulated in the amount of $1,751,251 to meet future debt service requirements. Included within those assets
are $661 of delinquent special assessments receivable, of which collection is uncertain.
The Economic Development Authority has issued lease revenue bonds to provide funding the for the construction of the
Fire & Emergency Services Facility. Debt service on this issue is provided through a lease agreement between the EDA
and the City. The City can source the lease payments to the EDA with any available resources, and expects that property
taxes will be the primary source. At the end of the current year, there are assets accumulated of $814,909 to meet future
debt service requirements.
Final
Interest Issue Maturity Original Payable
Rates Date Date Issue 12/31/24
General Obligation Bonds:
Improvement Bonds, Series 2018A 3.00 - 3.13% 7/11/2018 2/1/2034 2,305,000$ 1,390,000$
Refunding Bonds 2020A 1.03 - 1.11% 11/17/2020 2/1/2028 2,950,000 1,205,000
Lease Revenue Bonds:
EDA Lease Revenue Bonds 2024A 4.00 - 5.00% 12/9/2024 2/1/2046 16,900,000 16,900,000
Total - Bonded Indebtedness 22,155,000$ 19,495,000
Other Liabilities:
Unamortized Premium on Issuance of Bonds 1,195,915
Compensated Absences Payable 164,416
Total Governmental Activities 20,855,331$
Annual debt service requirements to maturity for governmental activities long-term indebtedness are as follows:
Principal Interest Principal Interest
480,000$ 81,556$ -$ 439,759$
495,000 64,081 - 750,300
525,000 45,756 525,000 737,175
540,000 26,606 550,000 710,300
225,000 13,531 575,000 682,175
330,000 23,403 3,345,000 2,937,125
- - 4,260,000 2,008,075
- - 5,240,000 1,021,200
- - 2,405,000 97,100
2,595,000$ 254,933$ 16,900,000$ 9,383,209$
2040 - 2044
2045 - 2046
Governmental ActivitiesGovernmental Activities
General Obligation Bonds
2035 - 2039
Total
Lease Revenue Bonds
2027
2028
2029
Year Ending
December 31
2025
2026
2030 - 2034
58
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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 $7,450,806, which
accounts for a debt-service coverage ratio of 161.18%.
Final
Interest Maturity Original Payable
Rates Date Date Issue 12/31/24
General Obligation Bonds:
Revenue Bonds, Series 2019A 4.00 - 4.00% 12/19/2019 12/1/2026 3,525,000$ 2,915,000$
Revenue Bonds, Series 2021A 1.00 - 3.00% 9/23/2021 2/1/2037 4,345,000 3,880,000
Revenue Bonds, Series 2021B 5.00 - 5.00% 9/23/2021 12/1/2026 7,390,000 1,065,000
Note from Direct Borrowing:
G.O. PFA Revenue Note, 2020 1.16% 4/27/2020 8/20/2040 17,199,866 14,055,000
G.O. PFA Revenue Note, 2023 2.84% 11/9/2023 8/20/2043 34,045,359 28,845,627
Sub-Total 66,505,225$ 50,760,627
Other Liabilities:
Unamortized Premium on Issuance of Bonds 693,924
Compensated Absences Payable 49,284
Total Business-type Activities 51,503,835$
59
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
Annual debt service requirements to maturity for business-type activities long-term indebtedness are as follows:
Principal Interest Principal Interest
2,210,000$ 243,355$ 2,153,000$ 950,652$
2,295,000 152,280 2,201,000 1,064,258
275,000 57,530 2,250,000 1,015,375
285,000 49,130 2,300,000 965,250
290,000 40,505 2,351,000 913,872
1,535,000 141,278 12,574,000 3,751,988
970,000 29,400 14,069,000 2,257,155
- - 9,529,000 628,895
7,860,000$ 713,478$ 47,427,000$ 11,547,445$
In November 2023, the City issued $34,045,359 of General Obligation PFA Revenue Note, Series 2023 for the purpose of
financing the eligible projects costs of the Clean Water State Revolving Fund project to improve treatment and for expansion
of the West Wastewater Treatment Facility. The aggregate principal amount of the loan disbursed and outstanding will bear
interest at the rate of 2.843 percent per annum accruing from and after the date of the Note, which is November 9, 2023,
through the date on which no principal of the loan remains unpaid and all accrued interest and servicing fees have been paid.
The annual debt service requirements to maturity presented are based on the final projected costs and debt authorized by
the Minnesota Public Facilities Authority. The balance of the debt represents costs incurred through December 31, 2024.
Total
Business-type Activities
2026
2027
2028
2029
Year Ending Note from Direct Borrowing
December 31
2025
2035 - 2039
2030 - 2034
2040 - 2043
Business-type Activities
General Obligation Bonds
60
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2024 was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental Activities:
General Obligation Bonds 3,055,000$ -$ (460,000)$ 2,595,000$ 480,000$
Lease Revenue Bonds - 16,900,000 - 16,900,000 -
Unamortized Bond Premium 234,506 1,004,014 (42,605) 1,195,915 -
Compensated Absences 136,799 227,038 (199,421) 164,416 32,883
Total - Governmental 3,426,305 18,131,052 (702,026) 20,855,331 512,883
Business-type Activities:
General Obligation Bonds 10,195,000 - (2,335,000) 7,860,000 2,210,000
Notes from Direct Borrowings 35,586,609 8,782,377 (1,468,359) 42,900,627 2,153,000
Unamortized Bond Premium 954,563 - (260,639) 693,924 -
Compensated Absences 44,506 82,899 (78,121) 49,284 9,857
Total - Business-type 46,780,678 8,865,276 (4,142,119) 51,503,835 4,372,857
Total Long-Term Liabilities 50,206,983$ 26,996,328$ (4,844,145)$ 72,359,166$ 4,885,740$
61
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
G. 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, 2024, the City's conduit debt consisted of the following:
Guardian Angels Senior Services
Revenue Bonds, Series 2017 27,510,000$
Guardian Angels Senior Services
Revenue Refunding Bonds, Series 2017A 8,355,000
Revenue Refunding Bonds, Series 2017B 3,880,000
Kaleidoscope Charter School
Revenue Bonds, Series 2014A 13,355,000
H. 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, 2024, the City has entered into two types of agreements.
Property Tax Abatements
For the year ended December 31, 2024, the City abated property taxes totaling $88,224. Details of each agreement and
the abatement for the current year are as follows:
• 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 began with taxes payable 2022. For the current
year, Wright County provided an abatement in the amount of $76,672. At the end of the current year, the total abatement
from Wright County totals $186,547.
62
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
Tax Increment Financing
For the year ended December 31, 2024, the Tax Increment Financing Districts within the City generated increment in the
amount of $499,441 and payments to the developers in the amount of $492,565. 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 2024, this tax increment
financing district generated increment in the amount of $88,037 and payments to the developer in the amount
of $116,488.
• 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 2024, this tax increment
financing district generated increment in the amount of $199,247 and payments to the developer in the amount
of $182,342.
• 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 2024, this tax
increment financing district generated increment in the amount of $212,157 and payments to the developer in the
amount of $193,735.
63
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
H. FUND EQUITY
Net position reported in the government-wide statement of net position at December 31, 2024 include the following:
Governmental Activities
Net Investment in Capital Assets:
Cost of Capital Assets 77,341,765$
Less: Accumulated Depreciation (23,958,387)
Less: Related Long-Term Debt Outstanding (20,690,915)
Add: Unspent Bond Proceeds 19,524,792
Less: Acquisition of Capital Assets on Account (282,090)
Total Net Investment in Capital Assets 51,935,165
Restricted for Debt Service
Fund Balance - Governmental Fund Financial Statements 1,882,352
Add: Unavailable Revenue - Special Assessments 683,450
Less: Accrued Interest Payable (37,565)
Total Restricted for Debt Service 2,528,237
Restricted for Lawful Gambling Programs 196,725
Restricted for Affordable Housing Programs 105,514
Restricted for Tax Increment Financing 371,954
Restricted for Park Development
Fund Balance - Governmental Fund Financial Statements 6,402,417
Add: Unavailable Revenue - Special Assessments 7,230
Total Restricted for Park Development 6,409,647
Restricted for Public Safety 645,927
Unrestricted 22,098,648
Total Governmental Activities Net Position 84,291,817$
64
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
Business-type Activities
Net Investment in Capital Assets:
Cost of Capital Assets 150,539,564$
Less: Accumulated Depreciation (29,790,911)
Less: Related Long-Term Debt Outstanding (51,454,551)
Less: Acquisition of Capital Assets on Account (2,553,592)
Less: Deferred Gain on Refunding (157,764)
Total Net Investment in Capital Assets 66,582,746
Unrestricted 44,702,215
Total Business-type Activities Net Position 111,284,961$
Aggregated funds balances reported in the governmental funds balance sheet at December 31, 2024 include the following:
Governmental Funds
Nonspendable Restricted Committed Assigned
General Fund
Prepaid Items 149,029$ -$ -$ -$
Assets Held for Resale 202,200 - - -
Public Safety - 180,133 - -
Insurance Deductibles - - - 294,193
Educational Programs - - - 69,614
Debt Service
Debt Service - 1,882,352 - -
Pavement Management
City Buildings & Infrastructure - - - 6,140,126
Fire & Emergency Services Facility
City Buildings & Infrastructure - 17,810,141 - -
Nonmajor Governmental Funds
Lawful Gambling Programs - 196,725 - -
Tax Increment Financing - 371,954 - -
Affordable Housing - 105,514 - -
Street Light Replacement - - 75,607 -
Business Development Loans - - 301,479 -
Park Development - 6,402,417 - -
Public Safety - 465,794 - -
City Buildings & Infrastructure - - - 11,353,898
City Vehicles & Equipment - - - 777,838
City Parks & Trails - - - 740,997
Total Fund Balances 351,229$ 27,415,030$ 377,086$ 19,376,666$
65
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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.
66
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
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
Membership in the General Plan includes employees of counties, cities, townships, certain school positions, and other
government entities whose revenues are derived from taxation, fees, or assessments. All full-time and certain part-time
employees of the City are covered by the General Employees Plan.
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. When a member is vested, they
have earned enough service credit to receive a lifetime monthly benefit after leaving public service and reaching an eligible
retirement age. Members who retire at or over their Social Security full retirement age with at least one year of service
qualify for a retirement benefit.
General Employees Plan Benefits
General Employees Plan requires three years of service to vest. 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 General Plan members. Members hired prior to July 1, 1989, receive the higher of Step or
Level formulas. Only the Level formula is used for members hired after June 30, 1989. Under the Step formula, General
Plan members receive 1.2 percent of the highest average salary for each of the first ten years of service, and 1.7 percent
for each additional year. Under the Level formula, General Plan members receive 1.7 percent of the highest average salary
for all years of service. For members hired prior to July 1, 1989, a full retirement benefit is available when age plus years of
service equal 90 and normal retirement age is 65. Members can receive a reduced requirement benefit as early as age 55
if they have three or more years of service. Early retirement benefits are reduced by 0.25 percent for each month under
age 65. Members with thirty or more years of service can retire at any age with a reduction of 0.25 percent for each month
the member is younger than age 62. The Level formula allows General Plan members to receive a full retirement benefit
at age 65 if they were hired before July 1, 1989 or at age 66 if they were hired after July 1, 1989. Early retirement begins
at age 55 with an actuarial reduction applied to the benefit.
Benefit increases are provided to benefit recipients each January. 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. The 2024 annual increase was 1.5 percent. Recipients that have been receiving the annuity or
benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase.
Recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the
effective date of the increase will receive a reduced or prorated increase.
67
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
C. CONTRIBUTIONS
Minnesota Statutes Chapters 353 and 356 sets the rates for employer and employee contributions. Contribution rates can
only be modified by the state Legislature.
General Employees Fund Contributions
General Plan members were required to contribute 6.5 percent of their annual covered salary in fiscal year 2024, and
the City was required to contribute 7.5 percent for General Plan members. The City's contributions to the General
Employees Fund for years ended December 31, 2024, 2023 and 2022 were $250,343, $189,626, and $161,169. 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, 2024, the City reported a liability of $1,286,582 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 $33,268.
City's proportionate share of the net pension liability 1,286,582$
State of Minnesota's proportionate of the net pension liability
associated with the City 33,268
Total 1,319,850$
The net pension liability was measured as of June 30, 2024, and the total pension liability used to calculate the net pension
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, 2023 through June 30, 2024, relative to the total employer contributions received from all of PERA's participating
employers. The City's proportionate share was 0.0348 percent at the end of the measurement period and 0.0284 percent
for the beginning of the period.
For the year ended December 31, 2024, the City recognized pension expense of $237,533 for its proportionate share of the
General Employees Plan's pension expense. Included in the amount, the City recognized $892 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.
During the Plan year ended June 30, 2024, the State of Minnesota contributed $170.1 million to the General Employees
Fund. The State of Minnesota is not included as a non-employer contributing entity in the General Employees Plan pension
allocation schedule for the $170.1 million in direct State-aid because this contribution was not considered to meet the
definition of a special funding situation. The City recognized $59,197 for the year ended December 31, 2024, as revenue
and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's on-behalf
contributions to the General Employees Fund.
68
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
At December 31, 2024, the City reported its proportionate share of the General Employees Plan's deferred outflows of
resources and deferred inflows of resources, related to pensions from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences Between Expected and Actual Economic Experience 113,386$ -$
Changes in Actuarial Assumptions 4,945 421,541
Net Difference Between Projected and Actual Investment Earnings - 359,488
Changes in Proportion 331,554 -
Contributions Paid Subsequent to the Measurement Date 125,172 -
Totals 575,057$ 781,029$
Deferred outflows totaling $125,172 related to pensions resulting from the City's contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2025.
Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in
pension expense as follows:
Year Pension
Ended Expense
December 31,Amount
2025 (195,944)$
2026 23,788
2027 (60,380)
2028 (98,608)
2029 -
Thereafter -
Total (331,144)$
E. LONG-TERM EXPECTED RETURN ON INVESTMENT
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a
regular basis of the long-term expected rate of return using a building-block method in which best-estimate ranges of expected
future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term
rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation
and best estimates of geometric real rates of return for each major asset class are summarized in the following table:
Target
Allocation Long-Term
Domestic Equity 33.50% 5.10%
International Equity 16.50% 5.30%
Fixed Income 25.00% 0.75%
Private Markets 25.00% 5.90%
Total 100.00%
Description
Asset Class
69
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
F. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2024, actuarial valuation was determined using an individual entry age normal
actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total liability
is 7 percent. This assumption is based on a review of inflation and investment return assumptions from a number of national
investment consulting firms. The review provided a range of return investment return rates considered reasonable by the
actuary. An investment return of 7 percent is within that range.
Inflation is assumed to be 2.25 percent and benefit increases after retirement are assumed to be 1.25 percent.
Salary growth assumptions range in annual increments from 10.25 percent after one year of service to 3.0 percent after 27
years of service.
Mortality rates are based on the Pub-2010 General Employee Mortality Table, adjusted slightly to fit PERA's experience.
Actuarial assumptions are reviewed every four years. The most recent four-year experience study was last reviewed in 2022.
The assumption changes were adopted by the Board and became effective with the July 1, 2023 actuarial valuation.
The following changes in actuarial assumptions and plan provisions occurred in 2024:
Changes in Actuarial Assumptions:
• Rates of merit and senority were adjusted, resulting in slightly higher rates.
• Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced retirements, slight
adjustments to Rule of 90 retriement rates, and slight adjustments to early retirement rates for Tier 1 and Tier 2 members.
• Minor increase in assumed withdrawals for males and females.
• Lower rates of disability
• Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the most recent
experience study.
• Minor changes to form of payment assumptions for male and female retirees.
• Minor changes to assumptions made with respect to missing participant data.
Changes in Plan Provisions:
• The workers' compensation offset for disability benefits was eliminated. The actuarial equivalent factors updated to
reflect the changes in assumptions.
70
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
G. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2024 was 7 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.
H. 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.
6.00% 7.00% 8.00%
One Point Current One Point
Decrease Rate Increase
General Employees Fund 2,810,096$ 1,286,582$ 33,348$
I. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan's fiduciary net position is available in a separately issued PERA financial report
that includes financial statements and required supplementary information. That report may be obtained at www.mnpera.org.
City's Proportionate Share
of the Net Pension Liability
71
CITY OF OTSEGO, MINNESOTA
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2024
NOTE 6 NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED
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. 102, Certain Risk Disclosures
The disclosures required by this Statement will provide users with timely information regarding certain concentrations
or constraints and related events that have occurred or have begun to occur that make a government vulnerable to a
substantial impact. This Statement will be effective for the year ending December 31, 2025.
• Statement No. 103, Financial Reporting Model Improvements
The changes required by this Statement provide clarity, enhance the relevance of information, provide more useful
information for decision making, and provide for greater comparability amongst government entities. This Statement
will be effective for the year ending December 31, 2026.
• Statement No. 104, Disclosure of Certain Capital Assets
The disclosures required by this Statement provide users of the financial statements with essential information about
certain types of capital assets. This Statement will be effective for the year ending December 31, 2026.
NOTE 7 RESTATEMENTS AND ADJUSTMENTS OF BEGINNING FUND BALANCES
During the year ended December 31, 2024, the City's Capital Improvements fund was changed from a major governmental
fund to a nonmajor governmental fund, resulting in a reduction of beginning fund balance for the major governmental funds.
Other
Capital Nonmajor
Improvements Governmental
Fund Balance - January 1 (As Previously Reported) 7,558,150$ -$
Change within Financial Reporting Entity (Major to Nonmajor) (7,558,150) 7,558,150
Fund Balance - January 1 (As Restated) -$ 7,558,150$
The Development & Builder Escrows fund was changed from a major governmental fund to a nonmajor governmental fund
during the year, however, the fund had no beginning or ending fund balance so there are no restatements presented.
Description
72
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 ($) Share of the Net Share of the Net Pension Liability Net Position
Fiscal Share of Share of Pension Liability Pension Liability City's Compared With as a Percentage
Year Net Pension Net Pension Associated With Associated With Covered Covered of the Total
Ending Liability Liability the City the City Payroll Payroll Pension Liability
June 30, 2024 0.0348% 1,286,582$ 33,268$ 1,319,850$ 2,945,420$ 43.68%89.10%
June 30, 2023 0.0284% 1,588,096 43,804 1,631,900 2,261,121 70.23%83.10%
June 30, 2022 0.0274% 2,170,089 63,613 2,233,702 2,051,891 105.76%76.70%
June 30, 2021 0.0252% 1,076,153 32,902 1,109,055 1,813,749 59.33%87.00%
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%
73
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, 2024 250,343$ 250,343$ -$ 3,337,910$ 7.50%
December 31, 2023 189,626 189,626 - 2,528,348 7.50%
December 31, 2022 161,169 161,169 - 2,148,921 7.50%
December 31, 2021 142,796 142,796 - 1,903,947 7.50%
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%
74
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2024
NOTE 1 GENERAL EMPLOYEES FUND
CHANGES FOR 2024
Changes in Actuarial Assumptions
• Rates of merit and seniority were adjusted, resulting in slightly higher rates.
• Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced retirements; slight
adjustments to Rule of 90 retirement rates; and slight adjustments to early retirement rates for Tier 1 and 2 members.
• Minor increase in assumed withdrawals for males and females.
• Lower rates of disability.
• Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the most
recent experience study.
• Minor changes to form of payment assumptions for male and female retirees.
• Minor changes to assumptions made with respect to missing participant data.
Changes in Plan Provisions
• The workers compensation offset for disability benefits was eliminated. The actuarial equivalent factors updated
to reflect the changes in assumptions.
CHANGES FOR 2023
Changes in Actuarial Assumptions
• The investment return assumption and single discount rate were changed from 6.5 percent to 7.0 percent.
Changes in Plan Provisions
• An additional one-time direct state aid contribution of $170.1 million was contributed to the Plan on October 1, 2023.
• The vesting period of those hired after June 30, 2010, was changed from five years of allowable service to three
years of allowable service.
• The benefit increase delay for early retirements on or after January 1, 2024, was eliminated.
• A one-time, non-compounding benefit increase of 2.5 percent minus the actual 2024 adjustment will be payable
in a lump sum for calendar year 2024 by March 31, 2024.
CHANGES FOR 2022
Changes in Actuarial Assumptions
• The mortality improvement scale was changed from scale MP-2020 to scale MP-2021.
Changes in Plan Provisions
• There have been no changes since the previous valuation.
75
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2024
CHANGES FOR 2021
Changes in Actuarial Assumptions
• The investment return and single discount rates were changed from 7.5 percent to 6.5 percent for financial reporting.
• The mortality improvement scale was changed from scale MP-2019 to scale MP-2020.
Changes in Plan Provisions
• There have been no changes since the previous valuation.
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.
76
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2024
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.
• Annual 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.
77
CITY OF OTSEGO, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2024
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 annual 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 $6.0 million, which meets the
special funding situation definition, was due September 2015.
78
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79
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2024
Total
Special Capital Nonmajor
Revenue Project Governmental
ASSETS
Cash and Investments 1,037,631$ 23,224,187$ 24,261,818$
Cash with Fiscal Agent - 899,742 899,742
Receivables
Accounts 13,637 - 13,637
Taxes
Current 11 - 11
Special Assessments
Deferred 15,724 216,690 232,414
Delinquent - 548 548
Due from Other Governments - 210,000 210,000
Due from Other Funds - 617,526 617,526
Total Assets 1,067,003 25,168,693 26,235,696
LIABILITIES
Accounts Payable - 487,298 487,298
Deposits Payable - 2,959,972 2,959,972
Due to Other Funds - 617,526 617,526
Unearned Revenue - 1,763,241 1,763,241
Total Liabilities - 5,828,037 5,828,037
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments 15,724 217,238 232,962
Grants for Subsequent Years - 144,169 144,169
Total Deferred Inflows of Resources 15,724 361,407 377,131
FUND BALANCES
Restricted
Lawful Gambling Programs 196,725 - 196,725
Tax Increment Financing 371,954 - 371,954
Affordable Housing 105,514 - 105,514
Park Development - 6,402,417 6,402,417
Public Safety - 465,794 465,794
Committed
Street Light Replacement 75,607 - 75,607
Business Development Loans 301,479 - 301,479
Assigned
City Buildings & Infrastructure - 11,353,898 11,353,898
City Vehicles & Equipment - 777,838 777,838
City Parks & Trails - 740,997 740,997
Unassigned - (761,695) (761,695)
Total Fund Balances 1,051,279 18,979,249 20,030,528
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 1,067,003$ 25,168,693$ 26,235,696$
80
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2024
Total
Special Capital Nonmajor
Revenue Project Governmental
REVENUES
Property Taxes -$ 1,353,617$ 1,353,617$
Tax Increments 499,441 - 499,441
Intergovernmental 52,757 1,430,217 1,482,974
Charges for Services 5,300 1,916,766 1,922,066
Special Assessments 3,532 29,572 33,104
Investment Earnings (net) 28,714 1,052,500 1,081,214
Miscellaneous 50,915 89,172 140,087
Total Revenues 640,659 5,871,844 6,512,503
EXPENDITURES
Current
Economic Development 501,367 - 501,367
Capital Outlay
General Government - 191,700 191,700
Public Safety - 1,141,148 1,141,148
Public Works - 931,366 931,366
Culture and Recreation - 1,501,793 1,501,793
Total Expenditures 501,367 3,766,007 4,267,374
Excess of Revenues
Over Expenditures 139,292 2,105,837 2,245,129
OTHER FINANCING SOURCES (USES)
Issuance of Debt - 899,742 899,742
Sales of Capital Assets - 6,775 6,775
Transfers Out - (2,000,000) (2,000,000)
Total Other Financing Sources (Uses) - (1,093,483) (1,093,483)
Net Change in Fund Balance 139,292 1,012,354 1,151,646
Fund Balance - January 1 (As Previously Reported) 911,987 10,408,745 11,320,732
Change within Financial Reporting Entity (Major to Nonmajor) - 7,558,150 7,558,150
Fund Balance - January 1 (As Restated) 911,987 17,966,895 18,878,882
Fund Balance - December 31 1,051,279$ 18,979,249$ 20,030,528$
81
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82
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.
Lawful Gambling
This fund was established to account for contributions from not-for-profit organizations who are conducting
licensed lawful gambling activities within the City. The contributions, which are based on 10% of net profits, are
restricted expenditures only for purposes outlined in Minnesota Statute.
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 accomodate approximately 15,000 square feet of future commercial development.
83
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
DECEMBER 31, 2024
Lawful Street Revolving
Gambling Lighting Loans
ASSETS
Cash and Investments 183,088$ 75,607$ 406,993$
Receivables
Accounts 13,637 - -
Taxes
Current - - -
Special Assessments
Deferred - 15,724 -
Total Assets 196,725 91,331 406,993
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments - 15,724 -
FUND BALANCES
Restricted
Lawful Gambling Programs 196,725 - -
Tax Increment Financing - - -
Affordable Housing - - 105,514
Committed
Street Light Replacement - 75,607 -
Business Development Loans - - 301,479
Total Fund Balances 196,725 75,607 406,993
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 196,725$ 91,331$ 406,993$
84
Total
Nonmajor
Tax Increment Tax Increment Tax Increment Special
District No. 1 District No. 3 District No. 4 Revenue
73,801$ 169,191$ 128,951$ 1,037,631$
- - - 13,637
- - 11 11
- - - 15,724
73,801 169,191 128,962 1,067,003
- - - 15,724
- - - 196,725
73,801 169,191 128,962 371,954
- - - 105,514
- - - 75,607
- - - 301,479
73,801 169,191 128,962 1,051,279
73,801$ 169,191$ 128,962$ 1,067,003$
85
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2024
Lawful Street Revolving
Gambling Lighting Loans
REVENUES
Tax Increments -$ -$ -$
Intergovernmental - - 52,757
Charges for Services - 5,300 -
Special Assessments - 3,532 -
Investment Earnings (net)7,790 3,377 17,547
Miscellaneous 50,915 - -
Total Revenues 58,705 12,209 70,304
EXPENDITURES
Current
Economic Development - - -
Net Change in Fund Balance 58,705 12,209 70,304
Fund Balance - January 1 138,020 63,398 336,689
Fund Balance - December 31 196,725$ 75,607$ 406,993$
86
Total
Nonmajor
Tax Increment Tax Increment Tax Increment Special
District No. 1 District No. 3 District No. 4 Revenue
88,037$ 199,247$ 212,157$ 499,441$
- - - 52,757
- - - 5,300
- - - 3,532
- - - 28,714
- - - 50,915
88,037 199,247 212,157 640,659
119,379 185,319 196,669 501,367
(31,342) 13,928 15,488 139,292
105,143 155,263 113,474 911,987
73,801$ 169,191$ 128,962$ 1,051,279$
87
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, 2024
Variance with
Original Final Budget -
and Final Actual Over
Budget Amounts (Under)
REVENUES
Tax Increments 94,043$ 88,037$ (6,006)$
EXPENDITURES
Current
Economic Development
Personal Services 900 1,217 317
Services and Other Charges 82,255 118,162 35,907
Total Expenditures 83,155 119,379 36,224
Net Change in Fund Balance 10,888 (31,342) (42,230)
Fund Balance - January 1 105,143 105,143 -
Fund Balance - December 31 116,031$ 73,801$ (42,230)$
88
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, 2024
Variance with
Original Final Budget -
and Final Actual Over
Budget Amounts (Under)
REVENUES
Tax Increments 212,838$ 199,247$ (13,591)$
EXPENDITURES
Current
Economic Development
Personal Services 1,100 1,303 203
Services and Other Charges 189,957 184,016 (5,941)
Total Expenditures 191,057 185,319 (5,738)
Net Change in Fund Balance 21,781 13,928 (7,853)
Fund Balance - January 1 155,263 155,263 -
Fund Balance - December 31 177,044$ 169,191$ (7,853)$
89
CITY OF OTSEGO, MINNESOTA
NONMAJOR SPECIAL REVENUE FUNDS
TAX INCREMENT DISTRICT NO. 4 - SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED DECEMBER 31, 2024
Variance with
Original Final Budget -
and Final Actual Over
Budget Amounts (Under)
REVENUES
Tax Increments 225,934$ 212,157$ (13,777)$
EXPENDITURES
Current
Economic Development
Personal Services 1,200 1,260 60
Services and Other Charges 203,698 195,409 (8,289)
Total Expenditures 204,898 196,669 (8,229)
Net Change in Fund Balance 21,036 15,488 (5,548)
Fund Balance - January 1 113,474 113,474 -
Fund Balance - December 31 134,510$ 128,962$ (5,548)$
90
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.
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.
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.
Municipal State-Aid for Construction
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.
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.
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.
Capital Improvements
This fund was established to accumulate resources that may be used to internally finance future City projects.
Development & Builder Escrows
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 within the City.
91
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
DECEMBER 31, 2024
Parks Revolving
Trails Park Capital Capital
Management Development Equipment Equipment
ASSETS
Cash and Investments 218,284$ 6,606,810$ 522,713$ 777,838$
Cash with Fiscal Agent - - - -
Receivables
Special Assessments
Deferred - 7,230 - -
Delinquent - - - -
Due from Other Governments - - - -
Due from Other Funds - - - -
Total Assets 218,284 6,614,040 522,713 777,838
LIABILITIES
Accounts Payable - 204,393 - -
Deposits Payable - - - -
Due to Other Funds - - - -
Unearned Revenue - - - -
Total Liabilities - 204,393 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments - 7,230 - -
Grants for Subsequent Years - - - -
Total Deferred Inflows of Resources - 7,230 - -
FUND BALANCES (DEFICITS)
Restricted
Park Development - 6,402,417 - -
Public Safety - - - -
Assigned
City Buildings & Infrastructure - - - -
City Vehicles & Equipment - - - 777,838
City Parks & Trails 218,284 - 522,713 -
Unassigned - - - -
Total Fund Balances (Deficits)218,284 6,402,417 522,713 777,838
Total Liabilities, Deferred Inflows of
Resources and Fund Balances (Deficits)218,284$ 6,614,040$ 522,713$ 777,838$
92
Total
City Buildings Development Nonmajor
Fire MSA Watershed & Property Capital & Builder Capital
Reserve Construction Districts Maintenance Improvements Escrows Projects
4,159,646$ -$ 2,364,209$ 133,181$ 5,459,307$ 2,982,199$ 23,224,187$
899,742 - - - - - 899,742
- - 8,281 - 201,179 - 216,690
- - - - 548 - 548
- - 210,000 - - - 210,000
- - - - 617,526 - 617,526
5,059,388 - 2,582,490 133,181 6,278,560 2,982,199 25,168,693
38,934 - 221,744 - - 22,227 487,298
- - - - - 2,959,972 2,959,972
- 617,526 - - - - 617,526
1,763,241 - - - - - 1,763,241
1,802,175 617,526 221,744 - - 2,982,199 5,828,037
- - 8,281 - 201,727 - 217,238
- 144,169 - - - - 144,169
- 144,169 8,281 - 201,727 - 361,407
- - - - - - 6,402,417
465,794 - - - - - 465,794
2,791,419 - 2,352,465 133,181 6,076,833 - 11,353,898
- - - - - - 777,838
- - - - - - 740,997
- (761,695) - - - - (761,695)
3,257,213 (761,695) 2,352,465 133,181 6,076,833 - 18,979,249
5,059,388$ -$ 2,582,490$ 133,181$ 6,278,560$ 2,982,199$ 25,168,693$
93
CITY OF OTSEGO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES (DEFICITS)
NONMAJOR CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2024
Parks Revolving
Trails Park Capital Capital
Management Development Equipment Equipment
REVENUES
Property Taxes 70,000$ -$ 400,000$ 550,393$
Intergovernmental - - - -
Charges for Services - 955,142 - -
Special Assessments - 2,410 - -
Investment Earnings (net)10,440 321,735 13,862 23,157
Miscellaneous - - 12,500 -
Total Revenues 80,440 1,279,287 426,362 573,550
EXPENDITURES
Capital Outlay
General Government - - - -
Public Safety - - - 30,781
Public Works - - - 154,661
Culture and Recreation 63,162 1,375,256 247 63,128
Total Expenditures 63,162 1,375,256 247 248,570
Excess (Deficiency) of Revenues
Over (Under) Expenditures 17,278 (95,969) 426,115 324,980
OTHER FINANCING SOURCES (USES)
Issuance of Debt - - - -
Sales of Capital Assets - - - 6,775
Transfers Out - - - -
Total Other Financing Sources (Uses)- - - 6,775
Net Change in Fund Balance 17,278 (95,969) 426,115 331,755
Fund Balance (Deficit) - January 1 (As Previously Reported)201,006 6,498,386 96,598 446,083
Change within Financial Reporting Entity (Major to Nonmajor)- - - -
Fund Balance (Deficit) - January 1 (As Restated)201,006 6,498,386 96,598 446,083
Fund Balance (Deficit) - December 31 218,284$ 6,402,417$ 522,713$ 777,838$
94
Total
City Buildings Development Nonmajor
Fire MSA Watershed & Property Capital & Builder Capital
Reserve Construction Districts Maintenance Improvements Escrows Projects
210,000$ -$ -$ 35,000$ 88,224$ -$ 1,353,617$
216,188 1,004,029 210,000 - - - 1,430,217
- - 346,956 - - 614,668 1,916,766
- - 2,761 - 24,401 - 29,572
219,058 - 111,085 5,507 347,656 - 1,052,500
- - - - 76,672 - 89,172
645,246 1,004,029 670,802 40,507 536,953 614,668 5,871,844
- - - 25,490 8,100 158,110 191,700
1,110,367 - - - - - 1,141,148
- - 309,977 - 10,170 456,558 931,366
- - - - - - 1,501,793
1,110,367 - 309,977 25,490 18,270 614,668 3,766,007
(465,121) 1,004,029 360,825 15,017 518,683 - 2,105,837
899,742 - - - - - 899,742
- - - - - - 6,775
- - - - (2,000,000) - (2,000,000)
899,742 - - - (2,000,000) - (1,093,483)
434,621 1,004,029 360,825 15,017 (1,481,317) - 1,012,354
2,822,592 (1,765,724) 1,991,640 118,164 - - 10,408,745
- - - - 7,558,150 - 7,558,150
2,822,592 (1,765,724) 1,991,640 118,164 7,558,150 - 17,966,895
3,257,213$ (761,695)$ 2,352,465$ 133,181$ 6,076,833$ -$ 18,979,249$
95
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, 2024
(With Comparative Actual Amounts for the Year Ended December 31, 2023)
2023
Variance with
Original Final Budget -
and Final Actual Over Actual
Budget Amounts (Under) Amounts
REVENUES
Property Taxes
Current 6,272,793$ 6,296,543$ 23,750$ 5,286,560$
Delinquent 50,000 74,054 24,054 (35,425)
Penalties and interest 2,000 2,693 693 2,522
Total Property Taxes 6,324,793 6,373,290 48,497 5,253,657
Franchise Taxes 132,000 114,342 (17,658) 126,594
Licenses and Permits
Business Licenses 40,950 45,496 4,546 38,095
Rental Licenses 42,700 46,670 3,970 38,770
Other Licenses 3,000 2,990 (10) 4,345
Right of Way Permits 60,000 50,400 (9,600) 54,375
Building Permits 1,494,790 1,711,960 217,170 1,396,183
Other Permits 15,600 10,950 (4,650) 13,001
Total Licenses and Permits 1,657,040 1,868,466 211,426 1,544,769
Intergovernmental
State
Local Government Aid 73,598 73,598 - -
Police Aid 93,000 111,191 18,191 92,918
Other Aid & Grants 295,386 28,534 (266,852) 479,608
Local
Other Aid & Grants - - - 2,995
Total Intergovernmental 461,984 213,323 (248,661) 575,521
Charges for Services
General Government 81,615 97,750 16,135 96,128
Public Works 89,800 82,148 (7,652) 63,296
Culture and Recreation 87,100 102,591 15,491 112,866
Total Charges for Services 258,515 282,489 23,974 272,290
Special Assessments 3,800 5,733 1,933 10,389
Fines and Forfeitures 30,900 40,982 10,082 32,109
Investment Earnings (net)106,920 274,351 167,431 295,571
Miscellaneous
Refunds and Reimbursements 12,500 21,541 9,041 35,577
Contributions and Donations - 914 914 686
Other 5,000 6,600 1,600 9,178
Total Miscellaneous 17,500 29,055 11,555 45,441
Total Revenues 8,993,452 9,202,031 208,579 8,156,341
2024
96
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, 2024
(With Comparative Actual Amounts for the Year Ended December 31, 2023)
2023
Variance with
Original Final Budget -
and Final Actual Over Actual
Budget Amounts (Under) Amounts
EXPENDITURES
General Government
City Council
Personal Services 33,434 34,634 1,200 34,622
Supplies 375 115 (260) 91
Services and Other Charges 74,053 53,633 (20,420) 53,959
Total 107,862 88,382 (19,480) 88,672
City Administrator
Personal Services 233,455 222,542 (10,913) 209,328
Supplies 400 470 70 256
Services and Other Charges 7,664 7,019 (645) 3,008
Total 241,519 230,031 (11,488) 212,592
Administration
Personal Services 374,103 325,449 (48,654) 273,319
Supplies 8,200 7,626 (574) 5,902
Services and Other Charges 81,105 68,121 (12,984) 66,881
Total 463,408 401,196 (62,212) 346,102
Elections
Personal Services 55,930 56,544 614 -
Supplies 14,537 7,057 (7,480) 409
Services and Other Charges 9,807 3,592 (6,215) 4,800
Total 80,274 67,193 (13,081) 5,209
Assessing
Services and Other Charges 161,370 162,700 1,330 161,020
Finance
Personal Services 325,887 229,835 (96,052) 275,530
Supplies 1,450 782 (668) 912
Services and Other Charges 71,221 62,935 (8,286) 58,195
Total 398,558 293,552 (105,006) 334,637
Information Technology
Personal Services 140,812 122,632 (18,180) -
Supplies 5,550 1,280 (4,270) 4,302
Services and Other Charges 64,659 64,270 (389) 111,806
Total 211,021 188,182 (22,839) 116,108
Legal
Services and Other Charges 36,800 40,750 3,950 32,899
Human Resources
Personal Services 149,353 149,057 (296) 121,310
Supplies 200 60 (140) 200
Services and Other Charges 32,908 32,785 (123) 49,268
Total 182,461 181,902 (559) 170,778
2024
97
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, 2024
(With Comparative Actual Amounts for the Year Ended December 31, 2023)
2023
Variance with
Original Final Budget -
and Final Actual Over Actual
Budget Amounts (Under) Amounts
EXPENDITURES (CONTINUED)
General Government (Continued)
Communications
Personal Services - 48,661 48,661 -
Services and Other Charges - 747 747 -
Total - 49,408 49,408 -
Prairie Center
Supplies 4,500 6,840 2,340 6,112
Services and Other Charges 49,134 44,608 (4,526) 42,335
Total 53,634 51,448 (2,186) 48,447
City Hall & Public Works Garage
Supplies 8,000 7,917 (83) 9,388
Services and Other Charges 132,573 150,000 17,427 132,274
Total 140,573 157,917 17,344 141,662
Old Town Hall
Services and Other Charges 4,465 4,410 (55) 4,210
Insurance Deductibles
Services and Other Charges - 12,118 12,118 855
Total General Government 2,081,945 1,929,189 (152,756) 1,663,191
Public Safety
Police Services
Services and Other Charges 2,052,077 2,063,959 11,882 1,612,222
Public Safety Commission
Personal Services 960 680 (280) 680
Supplies 500 1,582 1,082 42
Total 1,460 2,262 802 722
Fire Protection
Personal Services 189,505 185,769 (3,736) 87,575
Supplies 4,650 3,887 (763) 7,511
Services and Other Charges 1,174,529 1,209,884 35,355 1,056,217
Total 1,368,684 1,399,540 30,856 1,151,303
Building Inspections
Personal Services 188,980 175,292 (13,688) 169,030
Supplies 6,400 3,663 (2,737) 5,144
Services and Other Charges 376,377 365,919 (10,458) 358,024
Total 571,757 544,874 (26,883) 532,198
2024
98
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, 2024
(With Comparative Actual Amounts for the Year Ended December 31, 2023)
2023
Variance with
Original Final Budget -
and Final Actual Over Actual
Budget Amounts (Under) Amounts
EXPENDITURES (CONTINUED)
Public Safety (Continued)
Emergency Management
Supplies 2,000 976 (1,024) 216
Services and Other Charges 5,825 4,365 (1,460) 761
Total 7,825 5,341 (2,484) 977
Animal Control
Services and Other Charges 22,100 21,812 (288) 20,833
Total Public Safety 4,023,903 4,037,788 13,885 3,318,255
Public Works
Streets Maintenance
Personal Services 924,951 867,133 (57,818) 770,336
Supplies 220,300 201,470 (18,830) 246,050
Services and Other Charges 130,918 111,898 (19,020) 102,161
Total 1,276,169 1,180,501 (95,668) 1,118,547
Engineering
Services and Other Charges 105,220 71,772 (33,448) 62,918
Street Lighting
Services and Other Charges 182,480 178,473 (4,007) 173,395
Fleet Management
Personal Services 198,644 201,226 2,582 110,334
Supplies 227,695 192,645 (35,050) 191,895
Services and Other Charges 35,630 43,350 7,720 31,792
Total 461,969 437,221 (24,748) 334,021
Total Public Works 2,025,838 1,867,967 (157,871) 1,688,881
Culture and Recreation
Parks Maintenance
Personal Services 563,084 540,108 (22,976) 410,139
Supplies 95,250 93,208 (2,042) 93,191
Services and Other Charges 139,999 135,008 (4,991) 148,102
Total 798,333 768,324 (30,009) 651,432
Recreation
Personal Services 228,524 226,894 (1,630) 203,574
Supplies 15,650 20,761 5,111 9,891
Services and Other Charges 73,899 70,883 (3,016) 75,845
Total 318,073 318,538 465 289,310
Parks and Recreation Commission
Personal Services 960 330 (630) 550
Supplies 500 93 (407) 205
Services and Other Charges - - - 60
Total 1,460 423 (1,037) 815
2024
99
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, 2024
(With Comparative Actual Amounts for the Year Ended December 31, 2023)
2023
Variance with
Original Final Budget -
and Final Actual Over Actual
Budget Amounts (Under) Amounts
EXPENDITURES (CONTINUED)
Culture and Recreation (Continued)
Heritage Preservation Commission
Personal Services 840 400 (440) 300
Supplies 500 69 (431) 21
Services and Other Charges 500 589 89 607
Total 1,840 1,058 (782) 928
Total Culture and Recreation 1,119,706 1,088,343 (31,363) 942,485
Economic Development
Planning Commission
Personal Services 2,000 1,260 (740) 1,440
Supplies 500 - (500) 11
Total 2,500 1,260 (1,240) 1,451
Planning
Services and Other Charges 87,150 84,397 (2,753) 85,743
Economic Development
Personal Services - 261 261 -
Supplies 100 - (100) -
Services and Other Charges 15,210 4,682 (10,528) 4,594
Total 15,310 4,943 (10,367) 4,594
Total Economic Development 104,960 90,600 (14,360) 91,788
Capital Outlay
General Government 38,100 32,397 (5,703) 15,216
Public Safety 6,000 3,211 (2,789) 4,953
Public Works 10,000 23,868 13,868 5,715
Culture and Recreation 10,000 9,731 (269) 6,915
Total 64,100 69,207 5,107 32,799
Total Expenditures 9,420,452 9,083,094 (337,358) 7,737,399
Excess (Deficiency) of Revenues
Over (Under) Expenditures (427,000) 118,937 545,937 418,942
OTHER FINANCING SOURCES (USES)
Transfers In 427,000 427,000 - 320,600
Sales of Capital Assets - 10,000 10,000 1,359
Transfers Out - - - (710,829)
Total Other Financing Sources (Uses)427,000 437,000 10,000 (388,870)
Net Change in Fund Balance - 555,937 555,937 30,072
Fund Balance - January 1 4,981,515 4,981,515 - 4,951,443
Fund Balance - December 31 4,981,515$ 5,537,452$ 555,937$ 4,981,515$
2024
100
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101
CITY OF OTSEGO, MINNESOTA
COMBINING BALANCE SHEET
DEBT SERVICE FUND BY ACCOUNT
DECEMBER 31, 2024
Total
Series Series Series Debt
2018A 2020A 2024A Service
ASSETS
Cash and Investments 419,525$ 647,330$ -$ 1,066,855$
Cash with Fiscal Agent - - 814,909 814,909
Receivables
Special Assessments
Current 946 - - 946
Deferred 586,659 96,130 - 682,789
Delinquent 661 - - 661
Total Assets 1,007,791 743,460 814,909 2,566,160
LIABILITIES
Accounts Payable 179 179 - 358
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments 587,320 96,130 - 683,450
FUND BALANCES
Restricted 420,292 647,151 814,909 1,882,352
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 1,007,791$ 743,460$ 814,909$ 2,566,160$
102
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, 2024
Total
Series Series Series Debt
2018A 2020A 2024A Service
REVENUES
Property Taxes 102,144$ 197,000$ -$ 299,144$
Special Assessments 126,229 54,373 - 180,602
Total Revenues 228,373 251,373 - 479,746
EXPENDITURES
Debt Service
Principal 190,000 270,000 - 460,000
Interest 44,806 53,600 - 98,406
Fiscal Agent Fees 674 674 - 1,348
Total Expenditures 235,480 324,274 - 559,754
Excess (Deficiency) of Revenues
Over (Under) Expenditures (7,107) (72,901) - (80,008)
OTHER FINANCING SOURCES
Issuance of Debt - - 814,909 814,909
Net Change in Fund Balance (7,107) (72,901) 814,909 734,901
Fund Balance - January 1 427,399 720,052 - 1,147,451
Fund Balance - December 31 420,292$ 647,151$ 814,909$ 1,882,352$
103
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, 2024
Variance with
Original Final Budget -
and Final Actual Over
Budget Amounts (Under)
REVENUES
Property Taxes 102,144$ 102,144$ -$
Special Assessments 121,866 126,229 4,363
Total Revenues 224,010 228,373 4,363
EXPENDITURES
Debt Service
Principal 190,000 190,000 -
Interest 44,806 44,806 -
Fiscal Agent Fees 500 674 174
Total Expenditures 235,306 235,480 174
Net Change in Fund Balance (11,296) (7,107) 4,189
Fund Balance - January 1 427,399 427,399 -
Fund Balance - December 31 416,103$ 420,292$ 4,189$
104
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, 2024
Variance with
Original Final Budget -
and Final Actual Over
Budget Amounts (Under)
REVENUES
Property Taxes 197,000$ 197,000$ -$
Special Assessments 54,373 54,373 -
Total Revenues 251,373 251,373 -
EXPENDITURES
Debt Service
Principal 270,000 270,000 -
Interest 53,600 53,600 -
Fiscal Agent Fees 500 674 174
Total Expenditures 324,100 324,274 174
Net Change in Fund Balance (72,727) (72,901) (174)
Fund Balance - January 1 720,052 720,052 -
Fund Balance - December 31 647,325$ 647,151$ (174)$
105
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106
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
This part of the City of Otsego's annual comprehensive financial report (ACFR) 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 108
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 122
These tables contain information to help the reader assess the City's most significant
local revenue source, the property tax.
Debt Capacity 128
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 135
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 137
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.
107
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2015 2016 2017 2018
Governmental Activities
Net Investment in Capital Assets 15,303,426$ 19,103,702$ 21,496,582$ 25,330,507$
Restricted 4,547,327 4,292,589 4,973,536 6,929,688
Unrestricted 9,627,962 10,745,858 13,338,398 13,626,318
Total Governmental Activities Net Position 29,478,715$ 34,142,149$ 39,808,516$ 45,886,513$
Business-type activities
Net Investment in Capital Assets 11,553,869$ 15,889,294$ 20,504,751$ 24,701,888$
Unrestricted 15,474,362 15,248,794 15,679,356 18,287,811
Total Business-type Activities Net Position 27,028,231$ 31,138,088$ 36,184,107$ 42,989,699$
Primary Government
Net Investment in Capital Assets 26,857,295$ 34,992,996$ 42,001,333$ 50,032,395$
Restricted 4,547,327 4,292,589 4,973,536 6,929,688
Unrestricted 25,102,324 25,994,652 29,017,754 31,914,129
Total Primary Government Net Position 56,506,946$ 65,280,237$ 75,992,623$ 88,876,212$
Sources: The data for this table has been extracted from the respective years report.
108
Table 1
2019 2020 2021 2022 2023 2024
31,373,524$ 34,622,760$ 39,104,289$ 40,938,214$ 44,222,133$ 51,935,165$
7,658,124 7,445,422 7,661,049 8,427,066 9,937,633 10,258,004
11,357,968 13,214,418 16,552,822 19,748,485 21,270,456 22,098,648
50,389,616$ 55,282,600$ 63,318,160$ 69,113,765$ 75,430,222$ 84,291,817$
31,344,999$ 36,563,803$ 43,581,750$ 47,080,808$ 50,937,723$ 66,582,746$
18,919,363 24,166,085 28,340,412 33,253,596 39,121,354 44,702,215
50,264,362$ 60,729,888$ 71,922,162$ 80,334,404$ 90,059,077$ 111,284,961$
62,718,523$ 71,186,563$ 82,686,039$ 88,019,022$ 95,159,856$ 118,517,911$
7,658,124 7,445,422 7,661,049 8,427,066 9,937,633 10,258,004
30,277,331 37,380,503 44,893,234 53,002,081 60,391,810 66,800,863
100,653,978$ 116,012,488$ 135,240,322$ 149,448,169$ 165,489,299$ 195,576,778$
109
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED ON THE FOLLOWING PAGES
Last Ten Fiscal Years
(accrual basis of accounting)
2015 2016 2017 2018
GOVERNMENTAL ACTIVITIES
Expenses
General Government 1,174,510$ 1,376,793$ 1,085,554$ 1,228,607$
Public Safety 1,670,627 1,846,459 1,906,843 2,207,699
Public Works 6,521,708 3,389,909 2,618,584 3,348,200
Culture and Recreation 792,936 847,553 1,013,252 1,095,151
Economic Development 145,771 302,296 365,768 223,175
Interest on Long-term Debt 231,242 223,938 197,282 276,423
Total Expenses 10,536,794 7,986,948 7,187,283 8,379,255
Program Revenues
Charges for Services
General Government 36,235 81,876 100,125 118,219
Public Safety 1,191,134 1,677,788 1,384,626 1,698,522
Public Works 247,260 656,570 805,248 942,042
Culture and Recreation 52,075 59,236 67,112 80,047
Operating Grants and Contributions 244,497 248,910 261,814 328,410
Capital Grants and Contributions 3,154,662 4,437,611 3,957,672 5,800,583
Total Program Revenues 4,925,863 7,161,991 6,576,597 8,967,823
Net (Expense) / Revenue (5,610,931) (824,957) (610,686) 588,568
General Revenues and Transfers
Taxes
Property 4,602,153 4,963,787 5,572,250 6,078,341
Tax Increments - - - 96,938
Franchise Taxes 128,722 131,229 135,652 139,161
Unrestricted Grants and Contributions 242,970 255,951 231,683 191,570
Investment Earnings (net)55,909 82,385 124,052 263,784
Gain on Disposal of Capital Assets 35,600 31,160 38,373 37,563
Transfers 284,586 186,755 195,686 207,840
Transfers - Capital Assets - (162,876) (20,643) (1,525,768)
Total General Revenues and Transfers 5,349,940 5,488,391 6,277,053 5,489,429
Change in Net Position (260,991)$ 4,663,434$ 5,666,367$ 6,077,997$
110
Table 2
Page 1 of 3
2019 2020 2021 2022 2023 2024
1,383,291$ 1,616,634$ 1,509,107$ 1,849,685$ 1,838,849$ 2,156,382$
2,411,751 2,683,103 2,889,365 3,101,633 3,378,313 4,064,326
3,387,481 4,967,363 4,101,313 4,559,629 4,761,125 4,394,198
1,177,721 1,151,569 1,240,142 1,396,260 1,541,099 1,790,561
741,705 889,173 503,411 499,481 429,054 591,967
212,402 247,702 125,168 92,945 67,854 429,496
9,314,351 11,555,544 10,368,506 11,499,633 12,016,294 13,426,930
639,077 651,770 889,736 937,238 477,051 718,151
1,726,367 2,552,748 2,557,049 2,156,222 1,579,278 1,909,448
127,176 174,321 308,739 164,533 68,259 87,448
71,553 22,852 81,610 114,375 112,866 102,591
319,332 366,461 415,173 399,743 924,558 540,778
3,361,497 3,212,230 5,838,257 4,631,372 3,133,926 6,408,502
6,245,002 6,980,382 10,090,564 8,403,483 6,295,938 9,766,918
(3,069,349) (4,575,162) (277,942) (3,096,150) (5,720,356) (3,660,012)
6,681,989 7,170,868 7,718,135 8,583,996 9,177,125 9,022,265
97,419 275,445 311,971 436,817 491,535 497,951
137,510 132,137 129,467 345,108 1,026,846 1,043,896
162,120 1,411,685 64,729 152,452 111,798 162,084
754,079 625,964 (191,523) (870,574) 1,242,417 1,653,036
47,362 - 40,000 11,956 822 6,775
212,869 262,369 243,100 293,500 322,750 427,000
(520,896) (410,322) (2,377) (61,500) (336,480) (291,400)
7,572,452 9,468,146 8,313,502 8,891,755 12,036,813 12,521,607
4,503,103$ 4,892,984$ 8,035,560$ 5,795,605$ 6,316,457$ 8,861,595$
111
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED
Last Ten Fiscal Years
(accrual basis of accounting)
2015 2016 2017 2018
BUSINESS-TYPE ACTIVITIES
Expenses
Water Utility 1,246,064$ 1,276,338$ 1,377,537$ 1,468,485$
Sanitary Sewer Utility 2,207,811 2,480,519 2,477,995 2,561,070
Storm Water Utility 95,533 42,342 62,172 71,040
Total Expenses 3,549,408 3,799,199 3,917,704 4,100,595
Program Revenues
Charges for Services
Water Utility 1,261,303 1,334,442 1,529,127 1,754,947
Sanitary Sewer Utility 1,479,703 1,601,172 1,744,067 1,932,885
Storm Water Utility 76,211 75,932 94,919 104,916
Operating Grants and Contributions - - - -
Capital Grants and Contributions 2,020,299 4,766,947 5,591,332 5,500,794
Total Program Revenues 4,837,516 7,778,493 8,959,445 9,293,542
Net (Expense) / Revenue 1,288,108 3,979,294 5,041,741 5,192,947
General Revenues and Transfers
Property Taxes 25,000 25,000 25,000 26,000
Investment Earnings (net) 85,259 129,442 154,321 260,833
Gain on Disposal of Capital Assets - - - 7,884
Transfers (284,586) (186,755) (195,686) (207,840)
Transfers - Capital Assets - 162,876 20,643 1,525,768
Total General Revenues and Transfers (174,327) 130,563 4,278 1,612,645
Change in Net Position 1,113,781$ 4,109,857$ 5,046,019$ 6,805,592$
112
Table 2
Page 2 of 3
2019 2020 2021 2022 2023 2024
1,729,938$ 1,443,522$ 2,150,216$ 2,311,989$ 2,434,158$ 2,432,113$
2,600,436 2,739,519 3,257,261 4,084,200 4,590,454 4,701,984
123,163 138,985 188,245 218,612 224,368 335,501
4,453,537 4,322,026 5,595,722 6,614,801 7,248,980 7,469,598
1,734,090 2,108,577 2,982,786 3,020,259 3,643,209 3,083,184
2,254,688 2,473,673 3,048,707 3,543,804 4,165,010 4,480,718
109,372 120,579 122,200 137,178 143,961 158,272
- 2,157 - - - -
6,543,224 9,214,377 11,066,329 9,754,695 6,264,410 19,225,556
10,641,374 13,919,363 17,220,022 16,455,936 14,216,590 26,947,730
6,187,837 9,597,337 11,624,300 9,841,135 6,967,610 19,478,132
30,000 32,000 34,000 36,000 38,000 -
748,799 688,236 (225,303) (1,232,893) 2,704,796 1,871,352
- - - - 537 12,000
(212,869) (262,369) (243,100) (293,500) (322,750) (427,000)
520,896 410,322 2,377 61,500 336,480 291,400
1,086,826 868,189 (432,026) (1,428,893) 2,757,063 1,747,752
7,274,663$ 10,465,526$ 11,192,274$ 8,412,242$ 9,724,673$ 21,225,884$
113
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN NET POSITION - CONTINUED
Last Ten Fiscal Years
(accrual basis of accounting)
2015 2016 2017 2018
TOTAL PRIMARY GOVERNMENT
Expenses
Governmental Activities 10,536,794$ 7,986,948$ 7,187,283$ 8,379,255$
Business-type Activities 3,549,408 3,799,199 3,917,704 4,100,595
Total Expenses 14,086,202 11,786,147 11,104,987 12,479,850
Program Revenues
Governmental Activities 4,925,863 7,161,991 6,576,597 8,967,823
Business-type Activities 4,837,516 7,778,493 8,959,445 9,293,542
Total Program Revenues 9,763,379 14,940,484 15,536,042 18,261,365
Net (Expense) / Revenue (4,322,823) 3,154,337 4,431,055 5,781,515
General Revenues and Transfers
Governmental Activities 5,349,940 5,488,391 6,277,053 5,489,429
Business-type Activities (174,327) 130,563 4,278 1,612,645
Total General Revenues and Transfers 5,175,613 5,618,954 6,281,331 7,102,074
Change in Net Position 852,790$ 8,773,291$ 10,712,386$ 12,883,589$
Sources: The data for this table has been extracted from the respective years report.
114
Table 2
Page 3 of 3
2019 2020 2021 2022 2023 2024
9,314,351$ 11,555,544$ 10,368,506$ 11,499,633$ 12,016,294$ 13,426,930$
4,453,537 4,322,026 5,595,722 6,614,801 7,248,980 7,469,598
13,767,888 15,877,570 15,964,228 18,114,434 19,265,274 20,896,528
6,245,002 6,980,382 10,090,564 8,403,483 6,295,938 9,766,918
10,641,374 13,919,363 17,220,022 16,455,936 14,216,590 26,947,730
16,886,376 20,899,745 27,310,586 24,859,419 20,512,528 36,714,648
3,118,488 5,022,175 11,346,358 6,744,985 1,247,254 15,818,120
7,572,452 9,468,146 8,313,502 8,891,755 12,036,813 12,521,607
1,086,826 868,189 (432,026) (1,428,893) 2,757,063 1,747,752
8,659,278 10,336,335 7,881,476 7,462,862 14,793,876 14,269,359
11,777,766$ 15,358,510$ 19,227,834$ 14,207,847$ 16,041,130$ 30,087,479$
115
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116
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
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
2021 7,718,135 311,971 129,467 8,159,573
2022 8,583,996 436,817 345,108 9,365,921
2023 9,177,125 491,535 1,026,846 10,695,506
2024 9,022,265 497,951 1,043,896 10,564,112
Sources: The data for this table has been extracted from the respective years report.
117
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2015 2016 2017 2018
General Fund
Nonspendable 105,547$ 110,973$ 317,197$ 320,887$
Restricted - - - -
Assigned 128,646 192,408 205,257 205,449
Unassigned 2,656,330 3,342,821 3,368,191 3,587,331
Total General Fund 2,890,523$ 3,646,202$ 3,890,645$ 4,113,667$
All Other Governmental Funds
Nonspendable 2,675$ 2,000$ 1,325$ 650$
Restricted 2,278,379 1,931,757 3,290,750 4,167,765
Committed 406,683 419,829 474,863 448,699
Assigned 6,825,237 7,221,257 9,098,697 10,526,550
Unassigned (26,070) (281,273) (355,150) (1,790,236)
Total All Other Governmental Funds 9,486,904$ 9,293,570$ 12,510,485$ 13,353,428$
Sources: The data for this table has been extracted from the respective years report.
118
Table 4
2019 2020 2021 2022 2023 2024
323,124$ 334,946$ 354,473$ 323,790$ 338,076$ 351,229$
- - - - 465,819 180,133
223,740 242,785 272,801 327,332 342,861 363,807
3,772,946 5,410,002 4,572,627 4,300,321 3,834,759 4,642,283
4,319,810$ 5,987,733$ 5,199,901$ 4,951,443$ 4,981,515$ 5,537,452$
-$ -$ -$ -$ -$ -$
5,226,784 5,472,554 6,469,893 7,463,695 8,676,288 27,234,897
438,676 484,582 347,417 335,939 347,330 377,086
11,492,028 11,401,232 14,913,054 17,558,426 18,460,603 19,012,859
(4,463,532) (4,235,228) (3,523,065) (2,654,023) (1,765,724) (761,695)
12,693,956$ 13,123,140$ 18,207,299$ 22,704,037$ 25,718,497$ 45,863,147$
119
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2015 2016 2017 2018
Revenues
Property Taxes 4,651,453$ 4,960,518$ 5,595,120$ 6,084,051$
Tax Increments - - - 96,938
Franchise Taxes 128,722 131,229 135,652 139,161
Licenses and Permits 1,179,136 1,661,565 1,363,384 1,672,906
Intergovernmental 3,570,630 2,111,727 1,093,154 2,339,286
Charges for Services 555,660 1,274,578 2,129,514 2,328,991
Special Assessments 560,748 575,155 734,522 508,865
Fines and Forfeitures 11,998 16,223 21,092 25,616
Investment Earnings (net) 55,909 82,385 124,052 263,784
Miscellaneous 105,573 119,732 294,909 233,946
Total Revenues 10,819,829 10,933,112 11,491,399 13,693,544
Expenditures
General Government 1,141,113 1,233,680 1,072,195 1,182,959
Public Safety 1,664,031 1,807,985 1,886,661 2,168,187
Public Works 1,044,024 1,019,946 1,066,349 1,205,464
Culture and Recreation 466,205 534,122 587,739 654,786
Economic Development 145,771 196,534 195,716 223,175
Capital Outlay 4,477,153 4,349,555 2,160,857 8,422,796
Debt Service
Principal 1,130,000 1,210,000 1,125,000 1,160,000
Interest 256,148 233,498 206,748 182,875
Bond Issuance & Fiscal Agent Fee's 2,979 3,362 3,267 74,512
Total Expenditures 10,327,424 10,588,682 8,304,532 15,274,754
Excess (Deficiency) of Revenues
Over (Under) Expenditures 492,405 344,430 3,186,867 (1,581,210)
Other Financing Sources (Uses)
Transfers In 1,574,000 648,087 1,278,609 1,397,210
Issuance of Debt - - - 2,305,000
Premium on Issuance of Debt - - - 58,475
Sales of Capital Assets 35,600 31,160 78,805 75,860
Payment to Refunded Bond Escrow Agent - - - -
Transfers Out (489,801) (461,332) (1,082,923) (1,189,370)
Total Other Financing Sources (Uses)1,119,799 217,915 274,491 2,647,175
Net Change in Fund Balances 1,612,204$ 562,345$ 3,461,358$ 1,065,965$
Debt Service as a Percentage of
Noncapital Expenditures 14.22%18.40%19.32%16.69%
Sources: The data for this table has been extracted from the respective years report.
120
Table 5
2019 2020 2021 2022 2023 2024
6,662,307$ 7,141,972$ 7,715,949$ 8,563,236$ 9,179,680$ 9,026,051$
97,419 275,445 311,971 436,817 490,045 499,441
137,510 132,137 129,467 345,108 1,026,846 1,043,896
1,699,879 2,532,789 2,529,588 2,123,810 1,544,769 1,868,466
1,801,414 2,541,072 1,073,889 1,284,581 2,325,208 2,040,609
2,130,542 1,994,941 2,717,128 2,788,497 1,193,537 2,204,555
586,109 457,606 927,749 376,755 377,125 350,340
26,488 19,959 27,461 31,812 32,109 40,982
754,079 625,964 (191,523) (870,574) 1,242,417 1,653,036
141,533 149,472 221,998 197,499 228,315 169,142
14,037,280 15,871,357 15,463,677 15,277,541 17,640,051 18,896,518
1,313,178 1,479,856 1,465,403 1,679,038 1,767,226 1,929,189
2,379,440 2,667,435 2,874,479 3,080,382 3,318,255 4,037,788
1,683,958 1,640,892 1,934,040 2,086,883 1,955,380 1,867,967
710,406 695,747 779,820 851,357 942,485 1,088,343
265,498 889,173 503,411 499,481 429,054 591,967
7,001,285 5,137,983 2,379,157 2,331,797 5,701,144 6,089,490
1,185,000 1,330,000 1,360,000 660,000 685,000 460,000
230,217 222,250 153,062 144,431 119,406 98,406
2,874 65,483 1,078 1,348 1,678 380,570
14,771,856 14,128,819 11,450,450 11,334,717 14,919,628 16,543,720
(734,576) 1,742,538 4,013,227 3,942,824 2,720,423 2,352,798
1,274,595 2,465,348 2,677,946 1,646,807 1,099,621 2,427,000
- 2,950,000 - - - 16,900,000
- 312,200 - - - 1,004,014
68,378 - 40,000 11,956 1,359 16,775
- (3,170,000) - - - -
(1,061,726) (2,202,979) (2,434,846) (1,353,307) (776,871) (2,000,000)
281,247 354,569 283,100 305,456 324,109 18,347,789
(453,329)$ 2,097,107$ 4,296,327$ 4,248,280$ 3,044,532$ 20,700,587$
15.85%13.82%15.17%7.97%7.60%4.77%
121
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
ESTIMATED ACTUAL VALUE, TAXABLE MARKET VALUE AND TAX CAPACITY OF TAXABLE PROPERTY
Last Ten Fiscal Years
2015 2016 2017 2018
Estimated Actual Value 1,177,857,500$ 1,340,579,000$ 1,473,986,500$ 1,644,926,700$
Taxable Market Value
Real Estate 1,039,579,100$ 1,195,720,700$ 1,327,925,100$ 1,490,919,200$
Personal Property 14,952,700 16,476,000 20,388,300 23,397,400
Total Taxable Market Value 1,054,531,800$ 1,212,196,700$ 1,348,313,400$ 1,514,316,600$
Taxable Market Value as a Percentage
of Estimated Actual Value 89.53%90.42%91.47%92.06%
Tax Capacity
Real Estate 11,060,135$ 12,909,476$ 14,465,922$ 16,228,630$
Personal Property 298,480 328,948 407,194 467,378
Net Tax Capacity for Direct Rate 11,358,615$ 13,238,424$ 14,873,116$ 16,696,008$
Net Tax Capacity as a Percentage
of Estimated Actual Value 0.96%0.99%1.01%1.02%
Property Tax Levies
General Revenues 4,070,000$ 4,380,206$ 4,974,745$ 5,448,302$
Debt Service 610,000 640,000 655,000 655,000
Total Property Taxes Levied 4,680,000$ 5,020,206$ 5,629,745$ 6,103,302$
Tax Rates
General Revenues 35.832 33.087 33.448 32.632
Debt Service 5.370 4.834 4.404 3.923
Total Direct Tax Rate 41.202 37.921 37.852 36.555
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
122
Table 6
2019 2020 2021 2022 2023 2024
1,837,875,900$ 2,043,966,400$ 2,237,499,800$ 2,467,755,200$ 3,083,366,800$ 3,741,502,600$
1,666,323,700$ 1,864,979,200$ 2,054,871,100$ 2,285,619,500$ 2,918,108,912$ 3,578,280,843$
29,560,400 27,109,100 32,555,900 29,522,200 33,008,100 30,069,000
1,695,884,100$ 1,892,088,300$ 2,087,427,000$ 2,315,141,700$ 2,951,117,012$ 3,608,349,843$
92.27%92.57%93.29%93.82%95.71%96.44%
18,029,678$ 19,955,742$ 21,940,788$ 24,263,079$ 30,890,994$ 38,297,340$
578,862 541,536 650,470 589,792 659,438 600,555
18,608,540$ 20,497,278$ 22,591,258$ 24,852,871$ 31,550,432$ 38,897,895$
1.01%1.00%1.01%1.01%1.02%1.04%
5,975,816$ 6,447,491$ 7,078,874$ 8,037,818$ 8,785,607$ 8,689,617$
734,293 746,758 749,551 547,187 544,416 299,144
6,710,109$ 7,194,249$ 7,828,425$ 8,585,005$ 9,330,023$ 8,988,761$
32.114 31.455 31.335 32.342 27.846 22.340
3.946 3.643 3.318 2.202 1.726 0.769
36.060 35.099 34.653 34.544 29.572 23.109
123
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
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%
2021 16,107,001 1,982,727 3,121,710 665,277 650,470 64,073 22,591,258
71.30%8.78% 13.82%2.94%2.88%0.28% 100.00%
2022 17,987,127 2,273,760 3,269,738 666,662 589,792 65,792 24,852,871
72.37%9.15% 13.16%2.68%2.37%0.26% 100.00%
2023 22,782,140 3,569,387 3,728,910 740,756 659,438 69,801 31,550,432
72.21% 11.31% 11.82%2.35%2.09%0.22% 100.00%
2024 28,057,398 4,367,770 4,889,481 887,817 600,555 94,874 38,897,895
72.13% 11.23% 12.57%2.28%1.54%0.24% 100.00%
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
Residential
124
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
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 20.587 49.102 39.970 117.157 98.478 126.993
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 47.104 44.273 113.198 97.305 127.438
2020 31.455 3.643 35.099 34.371 15.865 45.280 44.421 113.891 95.385 124.800
2021 31.335 3.318 34.653 31.717 15.390 44.216 43.719 110.089 93.762 122.588
2022 32.342 2.202 34.543 30.889 15.459 42.438 43.751 109.183 93.753 120.732
2023 27.846 1.726 29.572 26.605 12.871 35.456 37.848 94.025 80.291 102.876
2024 22.340 0.769 23.109 23.924 13.525 32.282 33.737 80.770 70.371 89.128
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
Overlapping Rates Total Direct & OverlappingDirect Rates
125
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
PRINCIPAL PROPERTY TAXPAYERS Table 9
Current Year and Nine Years Ago
2024 2015
Percentage of Percentage of
Net Tax Total Tax Net Tax Total Tax
Taxpayer Classification Capacity Rank Capacity Value Capacity Rank Capacity Value
Duke Realty LP Industrial 1,587,504$ 1 4.08% 217,098$ 1 1.91%
Centerpoint Energy Utility 536,078 2 1.38% 157,042 3 1.38%
Wagner Spray Tech Corporation Industrial 312,016 3 0.80%
Evans Park Inc Apartments 254,745 4 0.65%
Target Corporation Commercial 229,328 5 0.59% 207,250 2 1.82%
Endeavor Investments XII LLC Industrial 213,838 6 0.55%
Otsego Apartments LLC Apartments 187,194 7 0.48%
R Schultz Exchange LLC Apartments 182,359 8 0.47%
Ahava Realty ADA Comliant LP Industrial 181,250 9 0.47%
US Home LLC Residential 159,870 10 0.41%
Elk Inn Partners LP Commercial 99,250 4 0.87%
Wright-Hennepin Co-Op Electric Utility 90,349 5 0.80%
Apex Business Center LLC Industrial 74,578 6 0.66%
21st Century Bank Commercial 51,118 7 0.45%
GCI Capital Commercial 46,662 8 0.41%
Minnwest Bank Central Commercial 45,450 9 0.40%
Darkenwalds Riverbend Commercial 40,734 10 0.36%
Totals 3,844,182$ 9.88%1,029,531$ 9.06%
Sources: The data for this table has been provided by the Wright County Auditor / Treasurer's Office.
126
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
2015 4,680,000$ 4,641,720$ 99.18% 38,280$ 4,680,000$ 100.00%
2016 5,020,206 4,979,508 99.19% 40,698 5,020,206 100.00%
2017 5,629,745 5,606,101 99.58% 23,644 5,629,745 100.00%
2018 6,103,302 6,084,700 99.70% 18,602 6,103,302 100.00%
2019 6,710,109 6,670,163 99.40% 33,926 6,704,089 99.91%
2020 7,194,249 7,134,792 99.17% 57,685 7,192,477 99.98%
2021 7,828,425 7,764,474 99.18% 60,961 7,825,435 99.96%
2022 8,585,005 8,506,576 99.09% 72,803 8,579,379 99.93%
2023 9,330,023 9,256,266 99.21% 61,268 9,317,534 99.87%
2024 8,988,761 8,919,625 99.23% - 8,919,625 99.23%
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.
127
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
RATIOS OF OUTSTANDING DEBT BY TYPE Table 11
Last Ten Fiscal Years
General Lease General Notes Percentage
Obligation Equipment Revenue Obligation from Direct Total of Personal Per
Bonds Certificates Bonds Revenue Bonds Borrowings Debt Income Capita
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 2.62% 1,373
2020 6,129,492 - - 15,026,658 9,438,936 30,595,086 2.70% 1,532
2021 4,719,716 - - 16,735,843 16,305,983 37,761,542 2.94% 1,774
2022 4,017,111 - - 40,370,203 15,696,489 60,083,803 4.25% 2,646
2023 3,289,506 - - 11,149,563 35,586,609 50,025,678 3.31% 2,163
2024 2,786,901 - 17,904,014 8,553,924 42,900,627 72,145,466 4.60% 3,004
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.
Business-Type ActivitesGovernmental Activities
128
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 12
Last Ten Fiscal Years
Total Percentage of
General Lease General Less: Amounts Net General Estimated
Obligation Equipment Revenue Bonded Debt Restricted to Obligation Actual Value Per
Bonds Certificates Bonds Outstanding Debt Service Debt of Property Capita
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% 153
2021 4,719,716 - - 4,719,716 2,362,735 2,356,981 0.11% 111
2022 4,017,111 - - 4,017,111 2,137,694 1,879,417 0.08% 83
2023 3,289,506 - - 3,289,506 1,931,847 1,357,659 0.04% 59
2024 2,786,901 - 17,904,014 20,690,915 2,528,237 18,162,678 0.49% 756
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.
129
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130
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
COMPUTATION OF DIRECT AND OVERLAPPING Table 13
GOVERNMENTAL ACTIVITIES DEBT
DECEMBER 31, 2024
Estimated Estimated Share
Debt Percentage of Overlapping
Governmental Unit Outstanding Applicable Debt
Overlapping Debt:
School Districts:
No. 728 - Elk River 263,240,000$ 22.25% 58,570,900$
No. 882 - Monticello 38,515,000 4.82% 1,856,423
No. 885 - St. Michael-Albertville 113,720,000 6.02% 6,845,944
Wright County 119,360,000 13.84% 16,519,424
Total Overlapping Debt 534,835,000$ 83,792,691
City of Otsego Direct Debt 2,786,901
Total Direct and Overlapping Debt 86,579,592$
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.
131
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2015 2016 2017 2018
Taxable Market Value 1,054,531,800$ 1,212,196,700$ 1,348,313,400$ 1,514,316,600$
Debt Limit Percentage 3.00% 3.00% 3.00% 3.00%
Debt Limit 31,635,954 36,365,901 40,449,402 45,429,498
Total Net Debt Applicable to Limit 5,221,786 4,218,268 3,782,338 4,090,309
Legal Debt Margin 26,414,168$ 32,147,633$ 36,667,064$ 41,339,189$
Total Net Debt Applicable to the Limit
as a Percentage of Debt Limit 16.51% 11.60% 9.35% 9.00%
Sources: The data for this table has been provided by Wright County and from City financial maintenance documents.
Note: Minnesota Statute 475.53 provides that no municipality shall incur or be subject to a net debt in excess of
three percent of the estimated market value of taxable property in the municipality.
132
Table 14
2019 2020 2021 2022 2023 2024
1,695,884,100$ 1,892,088,300$ 2,087,427,000$ 2,315,141,700$ 2,951,117,012$ 3,608,349,843$
3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
50,876,523 56,762,649 62,622,810 69,454,251 88,533,510 108,250,495
3,399,451 3,053,423 2,356,981 1,879,417 1,357,659 18,162,678
47,477,072$ 53,709,226$ 60,265,829$ 67,574,834$ 87,175,851$ 90,087,817$
6.68% 5.38% 3.76% 2.71% 1.53% 16.78%
133
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
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%
2021 5,902,263 6,380,178 4,639,776 7,642,665 2,469,779 791,745 234.33%
2022 6,443,632 7,131,721 5,615,835 7,959,518 3,128,000 1,045,956 190.69%
2023 7,599,947 4,281,034 5,876,572 6,004,409 29,820,278 1,572,433 19.13%
2024 7,452,794 6,453,331 6,455,319 7,450,806 3,803,359 819,255 161.18%
Sources: The data for this table has been provided from City financial maintenance documents.
Note: The debt service coverage ratio in 2023 varied significantly from prior years due to the repayment of $26,215,000 of Series 2022A bonds.
General Obligation Revenue Bonds
134
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 16
Last Ten Fiscal Years
School Enrollments
Per Capita No. 885
No. of Personal Personal Unemployment Median No. 728 No. 882 St. Michael
Population Households Income Income Rate Age Elk River Monticello Albertville
2015 15,472 5,394 682,361,616$ 44,103$ 3.8%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 3.6%34.3 133,461 4,168 6,335
2018 17,323 5,975 869,285,463 50,181 3.1%34.7 13,670 4,125 6,463
2019 18,130 6,254 949,341,190 52,363 3.3%34.3 13,921 4,201 6,557
2020 19,966 6,743 1,132,132,098 56,703 5.6%33.7 13,464 4,072 6,366
2021 21,289 7,190 1,285,685,288 60,727 3.4%34.7 13,847 4,166 6,653
2022 22,705 7,599 1,413,681,415 62,263 2.5%34.6 14,152 4,142 6,670
2023 23,132 7,909 1,509,154,812 65,241 2.9%34.4 14,352 4,138 6,696
2024 24,020 8,226 1,567,083,601 65,241 3.0%34.4 14,577 4,013 6,795
Sources: Population - Minnesota State Demographer (2015-2019 and 2021-2023); U.S. Census Bureau (2020); Estimated by City (2024)
Households - Minnesota State Demographer (2015-2023); Estimated by City (2024)
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 2024. In those instances, 2023 data was shown for the current year.
135
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 1,430 1 34.79% 1,297 1 41.91%
Trade, Transportation & Utilities 1,053 2 25.62% 644 2 20.81%
Construction 601 3 14.62% 246 4 7.95%
Leisure and Hospitality 431 4 10.49% 448 3 14.47%
Professional & Business Services 349 5 8.49% 204 5 6.59%
Other Services 101 6 2.46% 74 6 2.39%
Financial Activities - 0.00% 35 7 1.13%
Public Administration 48 7 1.17% 30 8 0.97%
Information - 0.00%
Totals 4,013 97.64% 2,978 96.22%
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.
2024 2015
136
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
FULL TIME CITY GOVERNMENT POSITIONS BY FUNCTION Table 18
Last Ten Fiscal Years
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General Government
Administration 4.0 3.5 3.6 3.6 3.6 4.0 4.0 4.2 4.2 5.5
Finance 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.0 4.0 4.0
Total General Government 7.0 6.5 6.6 6.6 6.6 7.0 7.0 8.2 8.2 9.5
Public Safety
Fire & Emergency Services - - - - - - - - 1.0 1.0
Building Inspections 1.0 1.5 1.5 1.8 2.0 2.0 2.0 2.0 2.0 2.0
Total Public Safety 1.0 1.5 1.5 1.8 2.0 2.0 2.0 2.0 3.0 3.0
Public Works
Street Maintenance 6.9 6.9 6.9 6.9 7.8 7.8 7.8 8.4 8.8 8.9
Mechanic 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 2.0 2.0
Total Public Works 7.9 7.9 7.9 7.9 8.8 8.8 8.8 9.4 10.8 10.9
Culture and Recreation
Parks Maintenance 3.5 3.5 3.5 3.9 4.4 4.4 4.4 4.5 5.2 5.8
Recreation 1.4 1.4 1.4 1.6 1.5 2.0 1.5 1.5 1.6 1.9
Total Culture and Recreation 4.9 4.9 4.9 5.5 5.9 6.4 5.9 6.0 6.8 7.7
Public Utilities
Water Utility 1.3 1.3 1.3 1.4 1.5 1.8 1.8 2.2 2.3 2.6
Sanitary Sewer Utility 3.7 3.7 3.7 4.1 4.5 5.4 5.4 6.5 6.9 7.7
Total Public Utilities 5.0 5.0 5.0 5.5 6.0 7.2 7.2 8.7 9.2 10.3
Total 25.8 25.8 25.9 27.3 29.3 31.4 30.9 34.3 38.0 41.4
Sources: The data for this table has been provided from City financial maintenance documents.
137
CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
Function 2015 2016 2017 2018
Administration
Rental Licenses Issued 372 387 351 329
Code Enforcement Citations 31 41 30 68
Registered Voters 9,324 9,754
Actual Votes Tallied 7,362 6,228
Police
Total Calls for Service 3,575 3,619 4,310 4,279
Fire
Calls - Albertville Department 76 93 129 131
Calls - Elk River Department 73 80 92 96
Calls - Rogers Department 15 12 27
Building Inspections
Number of Permits - All Types 893 968 722 1,147
New Homes Constructed 207 219 210 300
Public Works
Miles of Streets Constructed 1.66 2.59 3.93 7.80
Miles of Streets Reconstructed 0.35 1.80 5.30
Snow Plowing Events 16 16 22 37
Culture and Recreation
Parks Acres Maintained 184.3 190.3 160.0 160.0
Prairie Festival Attendance 6,200 5,000 4,000 4,800
Recreation Programs Offered 132 100 127 231
Recreation Programs Participants 12,662 12,662 17,341 20,885
Water Utility
Connections 3,023 3,155 3,278 3,748
Gallons Delivered 389,118,330 393,795,210 491,484,000 427,795,004
Sanitary Sewer Utility
Average Daily Gallons Treated 551,000 600,000 627,000 673,000
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.
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Table 19
2019 2020 2021 2022 2023 2024
332 300 297 334 351 345
18 37 42 51 64 46
13,081 13,895 15,197
11,389 9,402 13,727
4,484 4,145 3,783 3,696 3,917 3,889
164 158 204 209 257 300
105 92 110 96 109 101
26 28 59 93 71 89
1,173 1,791 1,856 1,826 2,172 1,882
300 403 435 317 221 239
4.68 1.47 3.83 2.83 0.56 2.14
- 0.78 0.76 2.28 3.79 3.90
21 11 19 32 12 11
160.0 173.0 175.0 175.0 175.0 177.0
6,450 - 6,850 8,000 11,000 7,000
153 52 161 177 186 177
18,500 5,359 16,936 23,397 24,383 29,189
4,014 4,335 4,445 5,100 5,295 5,373
491,074,000 632,552,814 787,182,348 765,960,269 904,558,000 728,579,000
738,000 798,000 840,000 900,000 983,000 1,023,437
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CITY OF OTSEGO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
CAPITAL ASSET STATISTICS BY FUNCTION
Last Ten Fiscal Years
Function 2015 2016 2017 2018
Public Safety
Fire & Emergency Services Vehicles - - - -
Building Safety Vehicles 1 1 1 1
Public Works
Street Miles (MSA) 118.59 120.88 124.81 131.00
Heavy Duty Trucks 8 8 8 9
Light Duty Vehicles 15 15 17 17
Tractors & Grading Equipment 8 8 8 7
Culture and Recreation
Trail Miles 19.96 21.13 25.11 25.60
Number of Parks 10 11 12 14
Playgrounds 7 8 9 10
Park Shelters 9 10 10 12
Ball Fields 5 6 6 6
Soccer Fields 3 3 3 3
Basketball Courts 5 5 5 6
Tennis Courts 7 8 8 8
Pickleball Courts
Outdoor Ice Rinks 1 1 1 1
Mowing Equipment 5 6 6 6
Water Utility
Water Towers 3 3 3 3
Wells 8 8 8 8
Miles of Water Main 74 77 79 83
Hydrants 794 846 871 923
Water Valves 1,659 1,841 1,881 1,983
Sanitary Sewer Utility
Treatment Facilities 2 2 2 2
Lift Stations 9 10 10 10
Miles of Sanitary Sewer Lines 74 76 80 82
Manholes 1,366 1,480 1,524 1,594
Miles of Sanitary Forcemain 20 20 20 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.
140
Table 20
2019 2020 2021 2022 2023 2024
- - - - 1 1
1 2 2 2 3 3
131.00 134.41 138.31 142.00 142.26 144.65
9 9 10 11 11 13
16 19 16 17 20 27
7 6 7 6 8 9
27.95 38.31 42.00 43.40 43.51 35.80
14 14 14 14 14 15
10 14 14 14 14 15
13 13 16 16 16 18
6 7 7 7 7 7
3 3 3 3 3 3
6 7 6 6 5 5
8 8 7 7 6 6
4 4 4 4
1 2 2 3 3 3
6 7 6 6 6 6
3 3 3 4 4 4
7 9 9 10 10 10
87 90 94 93 96 77
975 1,014 1,066 1,197 1,222 1,284
2,106 2,360 2,287 2,673 2,726 2,728
2 2 2 2 2 2
10 10 10 10 10 10
86 96.9 103.7 104.8 104.8 77.0
1,730 1,774 1,814 2,071 2,092 2,123
21 21 27 27 27 24
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